The tech stock boom is too strong. Qualcomm, Micron Technology, NVIDIA, Lumentum, and Corning all hit new highs again.

【Introduction】 Chip stocks continue to surge

On Monday, the three major U.S. stock indices slowed down, but chip stocks are still soaring!

On the evening of May 11, the Dow approached flat, while the Nasdaq and S&P 500 rose.

The semiconductor sector is still skyrocketing, with the Philadelphia Semiconductor Index surpassing 12,000 points, up over 2% to a new high.

Among them, Qualcomm surged about 10%, storage chip concepts led the gains, Western Digital rose over 7%, Micron Technology increased about 6%, and market capitalization briefly broke the $900 billion mark during trading. Nvidia rose 3%.

U.S. optical communication stocks expanded their gains, with Lumentum soaring over 17%, Corning rising about 10%, both hitting record highs.

Analysts said: “The tech stock boom is so strong that it’s enough to make the market ignore the high energy prices’ impact on the U.S. economy or stock market. Everyone is selectively ignoring the Middle East situation.” As long as the pressure from the Iran war persists, the market may be “more sideways” in the coming months, but this pressure will be offset by an “unprecedented” tech stock boom. “The market doesn’t want to fall because the tech boom is just too strong.”

Another analyst said the market still believes a ceasefire will eventually be reached, “The geopolitical situation remains extremely uncertain, but investors can still choose to temporarily ignore these issues.”

Despite ongoing delays in the conflict, strong Q1 earnings that exceeded expectations have prompted several Wall Street strategists to raise their full-year target for the S&P 500. CFRA raised the target from 7,400 to 7,730 points, citing consumer resilience and continued AI-related investments. Yardeni Research currently offers the highest forecast among strategists. The firm expects the S&P 500 to close the year at 8,250 points, higher than the previous forecast of 7,700.

Yardeni Research President and Chief Investment Strategist Ed Yardeni wrote in a report: “We have never seen the market revise earnings expectations for the current and future years so quickly in just a few months. The result is a rally driven by earnings in the U.S. stock market.”

Vital Knowledge founder Adam Krisafioli wrote in a client report that the recent rise in AI and semiconductor stocks looks similar to the speculative bubble of 1999.

But some see risks behind the recent rapid market surge. Michael Burry posted online early Monday morning that the market has become “reckless.”

Strategists also worry that high oil prices and potential supply shortages could undermine this rally.

Morgan Stanley warned Monday that the oil market is in a “race against time.” If the Strait of Hormuz remains closed until June, oil prices could rise sharply.

Sara Hunt, Chief Market Strategist at Alpine Saxon Woods, said in an interview: “The biggest concern is that energy prices previously had some buffer, but now the debate is about when that buffer will run out. When will we hit the bottom of oil inventories? When will this truly become a problem?”

(Source: China Fund News)