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Semiconductor stocks delivered massive gains in April, with several names rising 50% to 100%+ in a single month, driven by strong earnings growth and continued AI-related data center spending.
Bulls point to accelerating earnings and AI demand, while bears warn the sector looks overbought after such a rapid move, with competition and valuation becoming bigger risks.
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Semiconductor stocks ripped higher in April, with several names posting one-month gains that would outperform one-year returns for most portfolios. On CNBC's Halftime Report episode "Can the Market Move Higher in May?" (5/1/26), the panel openly split on a single question: Do you keep buying after a move this large, or sell on the risk that the momentum has gone too far?
Using the figures cited on the show, the standings were lopsided:
Advanced Micro Devices (NASDAQ:AMD): up 74%
Marvell Technology (NASDAQ:MRVL): up 67%
NVIDIA (NASDAQ:NVDA) and Applied Materials (NASDAQ:AMAT): up "only" 14 to 15%
The most speculative names led the rally, while the largest players lagged, which is a pattern often seen in the late stages of momentum-driven moves.
The bullish argument is that prices are finally catching up with improving underlying fundamentals. One panelist pointed to strong Q1 earnings, with overall growth near 29% and tech earnings exceeding 40%, which was well above expectations. That growth is being driven by roughly $700 billion in hyperscaler data center spending, fueling sustained demand for chips.
Micron Technology's valuation was highlighted as still reasonable relative to growth. The company reported revenue of $13.64 billion and guided to $18.7 billion next quarter, with margins expanding. One caller said, "Micron's valuation is not some valuation that makes you say, oh my God, there's got to be a trapdoor opening up under the share price sometime soon." For NVIDIA, the pullback from $213 to around $199 was framed as an opportunity, with expectations that AI CapEx is "projected to get higher next year."
The host cited that Wolfe Research called chips "overbought, extended, overhyped" and questioned whether 60 to 70% monthly gains are sustainable. A separate caller flagged a thesis-change risk for NVIDIA that Alphabet's TPUs and Amazon's Trainium chips could challenge NVIDIA's dominance. There is a longer-horizon ceiling, too, that "We will hit a wall at some point simply because we run out of energy."
For context on Intel's 114% move, the company posted non-GAAP EPS of $0.29 against a $0.0127 consensus and revenue of $13.577 billion, with Data Center and AI revenue up 22% YoY. CEO Lip-Bu Tan's 8-K commentary tied the rally to agentic AI driving demand for Intel's CPUs and packaging.
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