J.P. Morgan: Recent Chip Stock Declines Not the Start of a Long-term Downturn, But a Springboard for the Next Rally

J.P. Morgan notes that as many leading AI chip stocks have experienced double-digit declines, the divergence between chip stock prices and fundamentals is widening — particularly evident in European semiconductor stocks: despite rising expected earnings over the next 12 months, their share prices have even lagged behind the broader market average. The bank expects that AI-driven DRAM supply-demand tightness will persist through 2028, and the Q2 earnings season will be the catalyst for the next rally.