Chip Rally Risks a Pullback as AI Boom Meets Reality

Chip stocks rode a record-breaking quarter driven by AI hardware demand, with the Philadelphia Semiconductor Index surging as memory and AI-related names led gains. But last week’s pullback and ongoing intraday swings underscore a more volatile path ahead, as investors weigh whether hyperscalers’ continued AI spending, stretched valuations, and memory bottlenecks can sustain the rally through the rest of 2026.