An analyst has drawn parallels between the current surge in semiconductor equities and the trajectory of silver earlier this year, warning that memory chip stocks could be vulnerable to a sharp correction.
The comparison highlights growing concerns that the sector's recent outperformance may be nearing its limit, despite strong underlying demand for AI infrastructure.
The warning comes as semiconductor shares continue to extend their gains, creating a stark performance divergence with the so-called Magnificent Seven, which continues to face headwinds.
This split in fortunes is drawing attention from market strategists who are increasingly cautious about the sustainability of the chip rally.
While the broader market sentiment cools, the semiconductor sector has remained a bright spot, but the risk of a mean reversion is rising.
Morgan Stanley strategist Michael Wilson has previously issued a cautionary note on the semiconductor sector, suggesting the industry may be approaching a cyclical peak.