To The Moon

Chip stocks took a hit on Thursday, with Intel falling 5.34%, Broadcom dropping 4.35%, AMD losing 3.90% and NVIDIA declining 2.94%.

Yet AMD CEO Lisa Su delivered a very different message in Taipei: AI chip demand continues to exceed supply, even as production expands into 2026.

The problem isn’t simply whether customers want more chips. High-bandwidth memory (HBM), advanced packaging and wafer capacity remain constraints on how quickly the industry can deliver them.

So why are chip stocks falling if demand is still so strong?

There are two sides to this story.

🐂 The bull case

If demand continues to exceed supply, chipmakers could maintain strong pricing and benefit from further investment in AI infrastructure. Production constraints may limit near-term deliveries, but they also highlight how difficult it is for competitors to expand capacity quickly.

For NVIDIA and AMD, sustained demand could support future revenue growth. Broadcom also has exposure to AI networking and custom silicon.

🐻 The bear case

Strong demand doesn’t guarantee rising share prices. Investors may already have priced in years of AI growth, leaving these stocks vulnerable when expectations change.

Expanding manufacturing capacity takes time, and today’s supply constraints don’t guarantee the same pricing power in the future. AI customers must also demonstrate that their infrastructure spending generates sufficient returns to justify continued investment.

My take: I’m watching the gap between demand and delivery. If companies continue reporting strong orders while expanding capacity, the recent sell-off could create opportunities. But I’d also watch valuations, margins and customer spending before assuming every dip is a buying opportunity.

The AI chip story isn’t just about demand anymore. It’s about how much growth is already priced into the stocks.

Would you buy this dip in AMD and NVIDIA, or wait for the next earnings reports to confirm that demand remains strong?