Analysts Clash Over AI Chip Crash: Ives Calls Sell-Off Overdone, CNBC Warns of Structural Cracks

Key points

• Dan Ives of Wedbush stated that the recent semiconductor sell-off is 'way overdone,' suggesting the market has overreacted to fears regarding AI spending sustainability.
• The decline affected major names including Nvidia (NVDA), Micron (MU), SK Hynix (SKHY), and SanDisk (SNDK), following a broader tech pullback.
• CNBC reports that concerns over OpenAI’s revenue growth and Chinese competition from memory makers like ChangXin Memory Technologies (CXMT) are driving the weakness.
• The Federal Reserve’s first rate hike since 2023 in September, with another expected soon, adds macroeconomic pressure to the tech-heavy Nasdaq-100.
• Options data shows the Nasdaq-100’s implied volatility is near 20.7%, matching small-cap levels, yet the index has not delivered the expected large moves, suggesting a potential gap between fear and reality.

Background

This volatility follows a significant sell-off in late September and early October 2026, where AI leadership calls for spending pauses triggered a 17% drop in semiconductor ETFs. Asian chip stocks, including SK Hynix, also plunged in early October due to fears of AI funding sustainability and Chinese rivalry. While JPMorgan previously projected $1.4 trillion in AI infrastructure spending by 2030, current market anxiety reflects doubts about the durability of this boom.

How outlets are covering it

Dan Ives, via Yahoo Finance, views the current drop as an overreaction, labeling it 'way overdone' and implying a rebound is likely. In contrast, CNBC emphasizes structural cracks in the AI trade, citing OpenAI revenue concerns, Chinese competition, and rising interest rates as fundamental headwinds. CNBC’s options analysis suggests that while the market is dipping, it is moving less than options prices expect, creating a specific trading opportunity for those selling premium into the weakness, whereas Ives focuses on the valuation mispricing of the stocks themselves.

Why it matters

The divergence in analyst views highlights the uncertainty surrounding the AI investment cycle. If the sell-off is indeed overdone, major tech holdings may recover quickly. However, if structural issues like high interest rates and competitive threats from China persist, the tech sector could face prolonged pressure. Investors are watching for whether the Nasdaq-100 can hold key support levels despite elevated volatility expectations.

What to watch

Market participants are monitoring upcoming CPI data, bank earnings, and Taiwan Semiconductor results this week. The Federal Reserve decision and earnings from Microsoft and Alphabet are scheduled for October 28. Nvidia’s earnings report is expected around November 18, which may further influence the trajectory of the semiconductor sector.