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Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research, is telling clients to slow down on semiconductors after one of the sharpest rallies the group has produced in years. On the firm’s daily Schwab Market Update audio segment, Peterson noted that the PHLX Semiconductor Index climbed nearly 50% from March lows in an 18-session parabolic rally before ending Monday, then dropped 3.4% Tuesday on a Wall Street Journal report that OpenAI missed internal revenue and usage projections.
Peterson’s framing is technical. The story, he said, “is going to obviously kill momentum, at least for the next couple of weeks” and will “create overhead supply, meaning everyone who bought these chip stocks at all-time highs on Friday and Monday, which is bearish near-term.” His bottom line for active traders: “Traders need to be really careful here.”
However, OpenAI pushed back hard. CEO Sam Altman called the WSJ article “ridiculous”, and a spokesman told Bloomberg the company is “firing on all cylinders.”
The names sitting on top of the rally
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) is the textbook case. Shares are up 26.69% over the past month, and the 14-day RSI ran from 34.0 on March 30 to a peak of 76.3 on April 27 before easing to 65.4 on April 29. Polymarket traders are pricing a 98% probability of a down day today, which is exactly the overhead supply mechanic Peterson described. The longer-term picture is harder to argue with. Q4 FY2026 revenue hit $68.13B, up 73.2% YoY, with Q1 FY2027 guidance near $78.0B. The 8-K filing spells out the Blackwell and Rubin ramp.
AMD (NASDAQ:AMD) is the most stretched of the three. The stock is up 71.96% over the past month and 250.94% over the past year, and RSI peaked at 88.94 on April 24, an extreme reading. Fundamentals support the enthusiasm (Q4 2025 revenue of $10.27B, up 34.1%, plus a 6 GW OpenAI deployment), but at 126x trailing earnings there is little room for disappointment.
Broadcom (NASDAQ:AVGO) is up 38.19% over the past month, and already slipped 4.07% last week. Q1 FY2026 AI semiconductor revenue was $8.40B, up 106% YoY, with management guiding to $10.7B in Q2.
What to watch next
Peterson’s caution applies to the next couple of weeks, while the multi-year AI buildout remains intact. Most chip sector analysts still believe AI is in “the early innings,” and tonight’s earnings reports from Alphabet, Amazon, Meta and Microsoft will speak directly to the capex commitments underwriting these multiples. Retirement investors who bought below the March lows can largely ignore the noise. Anyone who chased Friday or Monday is the supply Peterson is warning about.
