Nvdia’s (NVDA) stock has been on fire this month.
JPMorgan strategist Mislav Matejka pours some cold water on the explosive move in the AI chipmaker in a new note on Monday.
The call: “We are sympathetic to continued outperformance of Mag-7, and reiterate our overweight on semiconductor names,” Matejka said. “However, we believe that overall market leadership will broaden and will not match last year’s behavior. In 2025, after first quarter softness, Nvidia rallied 120% over the following 6 months. The stock also saw weakness in the first quarter of this year and is up approximately 20% from the lows. While this is encouraging, we think the conditions for a repeat of last year’s hyper-concentrated rally are not in place.”
The trading backdrop for semis: The Philadelphia Semiconductor Sector Index (SOXX) is up a sizzling 9% in April.
Better known as the SOX on Wall Street, it’s a capitalization-weighted index composed of the 30 largest US companies involved in the design, distribution, manufacture, and sale of semiconductors.
It’s dominated by a few megacap names that serve as the foundation for the global artificial intelligence build-out. The four largest weightings in the index, from highest to lowest, are Nvidia, Broadcom (AVGO), Micron (MU), and AMD (AMD).
These four chip companies have seen their stocks surge in April. Memory chip player Micron has gained 37%, Broadcom is up 35%, AMD is up 25%, and Nvidia has tacked on 19%.
Why it’s happening: Besides pure momentum, the sector has recently gotten a jolt of good news. Taiwan Semiconductor Manufacturing Company (TSM) delivered a strong start to the year despite war-related uncertainty.
Taiwan Semiconductor’s first quarter revenue surged 35% year over year to a record 1.134 trillion New Taiwan dollars (about $35.6 billion). This represented the first time the foundry giant’s quarterly sales had crossed the trillion-dollar threshold in local currency. Results significantly surpassed the high end of its own previous guidance. Sales in March jumped 45% to roughly $13 billion, hinting that the AI supercycle is entering an even higher gear.
TSMC stock is up 21% in April.
Intel’s (INTC) earnings last week were good as well, with CEO Lip-Bu Tan signaling strength in AI chip demand.
Bottom line: Historical data-driven calls like this one are always tricky, as they’re based on what happened in the past. The reality is that in the near-term, it will be hard to shake the Nvidia bulls. Investors have plowed into semis hard relative to the March lows in the market, which appears justified given strong demand signals in earnings out of Taiwan Semiconductor and Intel.
