Episode summary
Chip Stocks Put Up Their Best Quarter Ever Despite Wild Swings | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 34 min · Hosts: Carol Massar, Tim Stenovec · Guests: Ian King, Dan Suzuki, Georgia Hall, Francesca Maglione, Yogesh Gupta
Summary
Semiconductor stocks dominated the opening conversation after posting their best quarter ever, but the host and Ian King argued that the rally is not evenly supported across the group. King said valuations have become extreme in parts of the sector, Nvidia’s story is less fresh than it was, and the real constraint is that memory-chip makers are being more disciplined about adding supply than in past cycles. He said the market is still being driven by AI demand, but warned that the stock surge will need broader evidence of AI’s impact beyond computing to look sustainable.
Dan Suzuki of iCapital then broadened the lens to the second half of the year, saying the market has been powered by strong growth, tax refunds, reopening effects and AI spending, but that several of those tailwinds are fading. He pointed to rising credit stress, record credit card debt, and a widening K-shaped consumer split as reasons for a choppier market, while arguing inflation may peak and the Fed could stay on hold or even cut if growth slows.
The episode also explored immigration backlogs and their effect on highly skilled talent, with Georgia Hall and Francesca Maglione describing a process that leaves many workers in limbo despite long-term U.S. demand for foreign-born expertise. Yogesh Gupta of Progress Software said his company is benefiting from AI because customers need tools that add context, control token use, and manage infrastructure rather than replace software entirely.
Key takeaways
- Ian King said semis are not moving in lockstep, with some names trading at extreme multiples while Micron and others still have strong earnings support.
- King argued Nvidia’s fundamentals remain solid, but its stock has lost some of the narrative advantage that powered earlier gains.
- Dan Suzuki said the second half faces three risks: fading consumer tailwinds, AI capex pushback and persistently higher rates.
- Suzuki said credit card delinquencies are near 15-year highs and consumers are drawing down savings to keep spending.
- Georgia Hall and Francesca Maglione reported that green-card backlogs and visa uncertainty are making the U.S. feel less permanent to many skilled immigrants.
- Yogesh Gupta said Progress Software is positioned for AI spending because businesses need context, governance and lower token consumption, not just more code generation.
Notable quotes
“We've seen a huge runup overall. Um, but some companies have run up way more than others”
“there doesn't appear to be a huge amount of differentiation between companies that are generating you know really good earnings and companies that are still got to prove themselves”
“What we need, I think, for this to to to gain confidence and gain the sense that, hey, it's going to last longer is AI to get out there in society”
“I think a lot of those are going to be going away. And so, it doesn't mean the market can't go up, but there's more risk to that story, and I think it's going to be a little bit choppier”
“the Kshape is getting wider and we talk about this in the report in our mid-year outlook”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Business Week Daily. Reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenbec on Bloomberg Radio.
You're not going to be surprised by this at all if you've been paying attention. We're talking, of course, about semiconductor stocks. Heading for their best quarter ever, extending an extraordinary start to the year driven by insatiable demand for AI equipment. But after recent jitters sent the stocks tumbling, investors are wondering how much further can the rally go.
Yeah, let's see what Ian King has to say. He's Bloomberg News US semiconductor reporter. He is in our Bloomberg News San Francisco bureau.
He is always our gut check and reality check when it comes to the semiconductor world. Hey Ian, it is good, great actually to have you here with Tim and me. Um quite a run, quite a bounce back uh that we have seen in semis.
The run in your view in the second quarter. Is it justified against the backdrop of the fundamentals of these companies? And I think we have to be smart here, right?
Because not every semi-name is the same.
No, you're you're absolutely right. We've seen a huge runup overall. Um, but some companies have run up way more than others.
And if you look at what that's done for the valuations, then that's clearly something that investors can key upon and decide. At the moment, it looks like we we don't really care. You've got a company like Intel, which I believe is the second best performer on the socks this year, and it's um trading at sort of o above 500 times.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai equipment demand
- semiconductor stocks
- market volatility
- index performance
- investment strategy
Companies and tickers mentioned
- PRGS
- Progress Software
- iCapital
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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