Fast and furious

According to BofA Global Research, semiconductors are now trading 62% above their 200-day moving average. Historically, major market bubbles peaked on average around 35% above their 200-day moving average.

This does not mean that AI is a bubble in the simple sense of the word. The underlying technological transformation is real, the investment cycle is massive, and some companies are producing extraordinary earnings growth.

But it does show how powerful the current market narrative has become. Semiconductors have moved far beyond normal trend levels, and expectations are now extremely high. When prices move faster than fundamentals, even great companies can become vulnerable to disappointment.

For long-term investors, this is not a call to abandon technology. It is a reminder to stay disciplined, to distinguish between structural growth and price paid, and to avoid confusing momentum with margin of safety.