Is This an AI Bubble?
I've been putting a lot of thought into this question, and for good reason. Profits have exploded among many of the semiconductor names as memory chip demand has SOARED! Micron Technology (MU) was the latest company in this space to absolutely blow away both quarterly revenue and earnings estimates and then significantly raise guidance.
Euphoric tops and bubbles are synonymous, however, so it begs the question: "Is this an AI bubble?"
Opinions vary, and I try to stay very objective in my analysis. So the first thing I decided to do was uncover the semiconductor stocks in the S&P 500 ($SPX) that are most responsible for this incredible surge off the March low, and look at their long-term charts.
Here are five of the most influential semiconductor companies in 2026, based on their three-month gains and their size in terms of market capitalization (I ignored NVIDIA Corp (NVDA) and Broadcom, Inc. (AVGO), both of which have badly lagged their peers in 2026).
Micron Technology
MU now has a market cap of more than $1.37 trillion and has gained more than 230.0% over the past three months, i.e. since the March low.
Advanced Micro Devices (AMD)
AMD now has a market cap of $868 billion and has gained more than 150% over the past three months.
Intel Corp (INTC)
INTC now has a market cap of $667.8 billion and has gained more than 192% over the past three months.
Applied Materials (AMAT)
AMAT now has a market cap of $530.4 billion and has gained more than 9o% over the past three months.
Sandisk Corp (SNDK)
SNDK now has a market cap of $345.8 billion and has gained more than 250% over the past three months.
One thing is very clear to me after looking at these five charts, which is that we've not seen anything like this from semiconductors throughout their history. And that's saying something, as semiconductors are widely known to go through boom and bust periods. This boom period has been different, however, and more powerful than all the others.
Is it sustainable? Honestly, it's difficult to address that question in one article, as there are many moving parts. First of all, we must consider the market environment, the current revenue and earnings of these companies, expected growth rates ahead, the direction of interest rates, etc.
Inside the AI Mania: What We'll Unpack in the Livestream
To address this "bubble" question in a bit more detail, we decided to host a FREE Livestream event, "Is This An AI Bubble?", on Saturday, June 27th at 10:00 am ET. It's free, but you do need to register to save your seat. For more information, CLICK HERE and we'll send you instructions on how to attend. This may be one of the biggest questions of this decade, perhaps even this century, so I hope you can join me!
Have a great weekend and Happy Trading!
Tom
