Episode summary
The Investment Committee discusses the stock rebound led by tech
CNBC Halftime Report
· · 8 min · Hosts: Scott Wapner · Guests: Jenny Harrington, Jim Lebenthal, Kevin Simpson, Brian Belski
Summary
The panel centered on whether the tech-led rebound can hold after a sharp selloff in semiconductors and AI-related names. The host said the Nasdaq was recovering, but only after a brutal prior session in which the semiconductor index had its worst day since the early days of the COVID outbreak, with Micron, AMD and NVIDIA all hit hard.
One panelist argued the drawdown reflected two separate forces: real policy risk around new Democratic governors and state legislatures slowing AI data center buildout, and a more immediate wave of deleveraging from highly levered long-short hedge funds. He said the market had been signaling weakness for weeks and suggested the selling may have been accelerated by forced unwinds and even some firms shutting down.
Another panelist agreed the selloff had been building and said the chips may now be in a more realistic valuation zone, pointing to NVIDIA around 14 times forward earnings and Micron at roughly four times. He also noted that the day’s downside volume was not extreme enough to declare the purge complete, leaving open the possibility of more volatility before the market fully stabilizes.
Key takeaways
- The panel saw yesterday’s chip rout as part policy concern and part forced deleveraging, with the host’s guests arguing hedge fund unwind pressure likely worsened the move.
- One panelist said new Democratic state leaders are more likely to slow AI data center buildout than stop it, because stopping it would risk recession and job losses.
- The panel viewed semis as having repriced sharply: the Philadelphia semiconductor index fell from up 106.6% year to date in mid-June to just 27.2% up by this week.
- The panelist argued NVIDIA near 14 times forward earnings and Micron near 4 times earnings reflect far more negative sentiment than fundamentals.
- Despite the rebound, another panelist said volume was still not heavy enough to prove the correction is finished and warned more volatility may remain.
Notable quotes
“THE MARKET WAS SNIFFING THIS OUT WELL IN ADVANCE”
“NVIDIA I BELIEVE 14 TIMES FORWARD EARNINGS. I BELIEVE MICRON MAYBE LOWER FOUR TIMES EARNINGS”
“DOWNSIDE VOLUME WAS 5 TO 1. USUALLY IN THESE TYPES OF DAYS YOU NEED LIKE AN EIGHT OR 10 TO 1”
How the episode opens
See how all this gets processed in the coming week. Safe travels home. Let's get to the judge. — Thank you carl.
Thanks. Welcome to the halftime report. I'm Scott Wapner front and center this hour.
The latest on this tech trade. Yes it's trying to rebound today. Many questions though still remain.
Which means we discuss and debate all of that with the investment committee. Joining me for the hour today, Jenny Harrington, Jim Lebenthal, Kevin Simpson and Brian Belski. All right.
Let's check the market. That's what it looks like right now. So the nasdaq looks great.
Again. It was down so much yesterday that it's still working hard to get a good portion of that back. Everything is green at the moment.
It was the worst day for the stocks. The semiconductor index since the very early days.
Of the.
Covid outbreak. To give you some perspective. And I thought Charles Schwab today had some more perspective that was noteworthy and I think worthy of a deeper conversation.
They point out in mid june, the filly semiconductor index was up by 106.6% year to date. That was mid june. That gain has now been cut to 27.2.
That shows you how much damage has been done within the chips. Yesterday alone, Micron AMD down more than 17%. Double digit losses almost across the board.
Nvidia down 9.5%. It's negative on the year at least. It did go negative yesterday.
Farmer jim I'm going to go to you first because you had tried to remain negative I mean positive excuse me. Freudian slip. It's a freudian slip.
I was thinking of his. I was thinking of his flinches and it made me think of was he going to flinch again? No, seriously.
Yeah. No, no.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- tech rebound
- semiconductor selloff
- stock market performance
- chip stocks
- market breadth
Companies and tickers mentioned
- SCHW
- MU
- AMD
- NVDA
- Charles Schwab
- Micron
- AMD
- Nvidia
Watch the episode
Watch “The Investment Committee discusses the stock rebound led by tech” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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