The rally is narrow but not irrational. A few leaders, especially NVIDIA and peers, are carrying index performance because they sit at the centre of real earnings growth, not just narrative.

Mallouk’s point has merit. The chip trade is still supported by genuine demand: hyperscaler capex, inference scaling, and supply constraints across GPUs, memory, and networking. That gives semis stronger near-term visibility than most sectors.

But the risk is concentration and expectations. When a small group drives the S&P 500 and Nasdaq Composite, the market becomes fragile. Any disappointment, even a “good but not great” quarter, can trigger outsized reactions.

So I would frame it this way:

Trend: still bullish, backed by earnings

Structure: increasingly fragile

Behaviour: late-cycle characteristics forming

Crowded trades can go further than expected, but upside becomes more incremental while downside becomes sharper.

I would stay invested, but avoid over-concentration in the obvious winners and be more selective with new entries.