I Was Wrong: This Is Not The Bottom For AI Stocks

What happened: An analyst downgraded the semiconductor sector to sell, reversing a prior view that AI stocks had reached a bottom, and cited unsustainable AI CapEx and questionable long-term ROI. Key numbers: Projected AI revenue must reach $2.5T to $3T by 2030, a target the analyst views as highly improbable. Semiconductor stocks sold off ahead of the midterms. Why it matters: The analyst expects prolonged volatility and lower multiples as ROI doubts persist, with rising rates and customer concentration on OpenAI and Anthropic amplifying execution and revenue risks.

An analyst downgraded the semiconductor sector to sell, reversing a prior view that AI stocks had reached a bottom, and cited unsustainable AI CapEx and questionable long-term ROI.

The analyst expects prolonged volatility and lower multiples as ROI doubts persist, with rising rates and customer concentration on OpenAI and Anthropic amplifying execution and revenue risks.