Semiconductor demand slowdown from AI safety concerns and rate hike fears

Demand thesis

decreasing

Why underpricing possible

partially recognized

Evidence

• Headlines: Wall Street down on losses in Nvidia and chipmakers after AI safety concerns; Semiconductors ETF -5.3% unusual move
• Headlines: Micron -7.1% unusual move; Dow Jones Futures: Nvidia, Micron, Sandisk Dive On AI Fears
• Morgan Stanley joins Goldman Sachs in forecasting a Fed hike, raising rate hike expectations

Risks

• AI demand could reaccelerate, rate hike fears could subside, and semiconductor cycle could turn up.

Potential beneficiaries

Best currently accessible expressions

Portfolio action

HOLDING

Invalidation

• If AI safety concerns are resolved or if rate hike expectations diminish.