The US equity markets are pricing in financing strain and a possible demand cliff in the AI bubble narrative. However, the latest broker research continues to model multi-year earnings growth and, in several cases, describes forward valuations as being at trough or near-trough levels.
Chipmakers are at the centre of the debate because they supply the physical capacity that hyperscaler spending ultimately requires.
Three names dominate the research discussion: NVIDIA, SK Hynix, and the foundry-and-custom-silicon pairing of TSMC and Broadcom.
The core tension for chipmakers is the gap between order-book visibility and the multiples the market is willing to pay.
AI stocks slid again on Tuesday, November 3, as investors questioned whether the sector's infrastructure build-out can generate returns quickly enough to justify its financing needs. Korean chipmakers led the decline, with Samsung Electronics and SK Hynix falling as much as about 5% in early Seoul trading.