Big tech lost $2 trillion on AI doubts but chip suppliers gained $2 trillion — follow the money to AMD and Intel
Big tech giants like the Mag 7 lost trillions in value last month because investors are worried their AI spending isn't paying off. But investors are still pouring money into the chip suppliers, which now make up a record percentage of the S&P 500.
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There is a stark divergence in the tech trade: while the Magnificent Seven lost $2.3 trillion in June due to AI spending scrutiny, investors simultaneously poured $2 trillion into chipmakers like Micron, Intel, and AMD. Semiconductors now make up a record 19.7% of the S&P 500. This shows that instead of abandoning AI, money is rotating downstream to the 'pick and shovel' suppliers who profit from the build-out regardless of whether software giants monetize it. The divergence is a strong signal to buy the chipmakers.
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- Semiconductor stocks climb to record 19.7% of the S&P 500 as AI rally reshapes the index — Yahoo Finance
- Record chip rally adds $2 trillion in combined value to Micron, Intel and AMD in second quarter — CNBC
- Magnificent Seven shed $2.3 trillion in June as AI spending comes under closer scrutiny (MSFT) — Yahoo Finance