Mike Wilson, Morgan Stanley’s Chief Investment Officer and Chief US Equity Strategist, is waving a yellow flag over what has been one of the market’s most crowded trades. His message: semiconductor stocks may be approaching a cyclical peak, and the smart money should be watching hyperscalers for confirmation.
The call comes after a bruising stretch for tech. The Nasdaq Composite fell 4.6% in a single week in late June, while the Philadelphia Semiconductor Index (SOX) dropped a sharper 7.9% over the same period.
The hyperscaler signal
Wilson’s thesis hinges on a somewhat counterintuitive observation. Hyperscalers, the Microsofts and Amazons and Metas of the world, are actually spending more than ever on AI infrastructure. Capital expenditure forecasts for the group have been revised significantly upward, with projections now sitting at $805 billion for 2026 and a staggering $1.116 trillion for 2027.
Despite that spending bonanza, hyperscaler stocks themselves have been showing weakness. And in Wilson’s framework, that disconnect is the canary in the coal mine for chip stocks.
