Chip Stocks Soared 70%+ in April. Have They Gone Too Far?

Semiconductor stocks ripped higher successful April, with respective names posting one-month gains that would outperform one-year returns for astir portfolios. On CNBC's Halftime Report occurrence "Can the Market Move Higher successful May?" (5/1/26), the sheet openly divided connected a azygous question: Do you support buying aft a determination this large, oregon merchantability connected the hazard that the momentum has gone excessively far?

The April spot leaderboard

Using the figures cited connected the show, the standings were lopsided:

• Intel (NASDAQ:INTC): up 114%

• Astera Labs (NASDAQ:ALAB): up 78%

• Advanced Micro Devices (NASDAQ:AMD): up 74%

• Marvell Technology (NASDAQ:MRVL): up 67%

• Micron Technology (NASDAQ:MU): up 53%

• NVIDIA (NASDAQ:NVDA) and Applied Materials (NASDAQ:AMAT): up "only" 14 to 15%

The astir speculative names led the rally, portion the largest players lagged, which is simply a signifier often seen successful the precocious stages of momentum-driven moves.

The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks and Astera Labs wasn't 1 of them. Get them present FREE.

The Bull Case: Earnings Are Driving the Move

The bullish statement is that prices are yet catching up with improving underlying fundamentals. One panelist pointed to beardown Q1 earnings, with wide maturation adjacent 29% and tech net exceeding 40%, which was good supra expectations. That maturation is being driven by astir $700 billion successful hyperscaler information halfway spending, fueling sustained request for chips.

Micron Technology's valuation was highlighted arsenic inactive tenable comparative to growth. The institution reported gross of $13.64 billion and guided to $18.7 billion adjacent quarter, with margins expanding. One caller said, "Micron's valuation is not immoderate valuation that makes you say, ohio my God, there's got to beryllium a trapdoor opening up nether the stock terms sometime soon." For NVIDIA, the pullback from $213 to astir $199 was framed arsenic an opportunity, with expectations that AI CapEx is "projected to get higher adjacent year."

The Bear Case: Momentum May Be Overextended

The big cited that Wolfe Research called chips "overbought, extended, overhyped" and questioned whether 60 to 70% monthly gains are sustainable. A abstracted caller flagged a thesis-change hazard for NVIDIA that Alphabet's TPUs and Amazon's Trainium chips could situation NVIDIA's dominance. There is simply a longer-horizon ceiling, too, that "We volition deed a partition astatine immoderate constituent simply due to the fact that we tally retired of energy."