Nvidia Corporation (NASDAQ:NVDA) has seen its stock prices more than double since the start of the year due to the boom in AI-related investments. However, experts warn of the cyclical nature of the semiconductor industry and potential slowdowns in the future.
The concept of a semiconductor supercycle refers to sustained periods of growth and increased demand that can last several years.
“The boom in spending on AI infrastructure has been a major growth driver for the chip industry,” Miller said.
“If excitement and investment in AI slow, chip industry growth will slow, too.”
Despite the warnings, some believe it’s too early to declare a new supercycle. Thomas Rupf, chief investment officer at private bank VP Bank Asia, and Josie Ananto, a principal at EY-Parthenon’s strategy and transactions team, both see persistent demand and investment opportunities in the sector.
Despite the competition, Nvidia is not standing still. In May, Nvidia CEO Jensen Huang announced the company would release new chips on a “one-year rhythm” instead of its traditional two-year release cycle.
However, the semiconductor rally has faltered in the second half of the year. The Invesco QQQ Trust Series QQQ, a fund that tracks the NASDAQ 100, is down more than 5% throughout the last month. In the last month, Dell’s stock is down 25%, Nvidia’s more than 15%, while AMD is down around 13%.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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