MU, INTC, AMD And Other AI Stocks Get Crushed — But Dan Ives Downplays Selloff, Morgan Stanley's Slimmon Calls Chip Stock Rout 'Healthy'

• Ives acknowledged that a sharp selloff in South Korean technology stocks could create near-term pressure for U.S. tech shares.
• His comments came after SK Hynix overtook Samsung Electronics as South Korea's most valuable listed company.
• Despite the pullback, Ives remained firmly bullish on the artificial intelligence trade, arguing that short-term volatility does not change the long-term investment case for leading AI companies.

The rout in chip stocks continued into Tuesday, with Micron Technology Inc. (MU), Intel Corp. (INTC), Advanced Micro Devices Inc. (AMD), and other semiconductor stocks plummeting between 8% to 10% in the opening trade.

The Direxion Daily Semiconductor Bull 3X Shares (SOXL) ETF was down more than 20% at the time of writing, while the iShares Semiconductor ETF (SOXX) fell nearly 7%.

The tech-heavy Nasdaq Composite was down more than 2% at the time of writing, on track for its second-worst single-day performance after tanking 4% earlier this month. The index also declined more than 1% on Monday.

Dan Ives Dismisses Selloff Concerns

Dan Ives, Global Head of Tech Research at Wedbush, on Tuesday dismissed the concerns of a selloff in AI stocks.

He acknowledged in a post on X that a sharp selloff in South Korean technology stocks could create near-term pressure for U.S. tech shares. His comments came after SK Hynix overtook Samsung Electronics as South Korea's most valuable listed company and the benchmark KOSPI index hit a record high before retreating roughly 10% the following day.

Despite the pullback, Ives remained firmly bullish on the artificial intelligence trade, arguing that short-term volatility does not change the long-term investment case for leading AI companies.

He reiterated his preference for owning what he describes as the sector's AI winners, suggesting the recent weakness is more reflective of profit-taking and market dynamics than a deterioration in underlying fundamentals.

Morgan Stanley Strategist Calls Selloff ‘Healthy’

Morgan Stanley Investment Management’s Senior Portfolio Manager, Andrew Slimmon, termed the selloff in memory and semiconductor stocks healthy.

During an interview with CNBC, Slimmon said that he thinks the AI beneficiaries are experiencing a selloff, though he does not think that these stocks are expensive.

“They’re crowded. It’s captured kind of the zeitgeist of the momentum traders. When that happens, you’re going to have sharp selloffs like we’re having. I’d argue it’s healthy, it’s good for the markets,” he said.

Slimmon added that there should not be as much euphoria as there is in tech stocks currently. The Nasdaq 100 index has surged 17% year-to-date, compared to an 8% rise in S&P 500 and 7% in the Dow Jones Industrial Average (DJIA) indexes.

He also said that selloffs like these are needed to wash out the speculators in the market, while noting that some people are buying these stocks because they’re going up, not because they believe in AI.

The Invesco QQQ Trust (QQQ) is up 36% over the past 12 months, while the iShares U.S. Technology ETF (IYW) is up 49%.

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