JPMorgan is telling its clients to stop worrying and learn to love the semiconductor selloff. The bank’s Mid-Year Outlook 2026 doubles down on chipmakers as a core investment thesis, naming Broadcom specifically as a Strong Buy for the remainder of the year and flagging the broader AI-driven chip cycle as far from over.
The recommendation comes at an interesting moment. Semiconductor stocks have been under pressure in recent weeks as investors fret about whether the pace of AI infrastructure spending can be sustained beyond 2026.
The case for chips right now
JPMorgan analyst Harlan Sur and the broader research team are pointing to an AI chip backlog as the primary catalyst behind the Broadcom call. In English: there are more orders for AI chips than companies can currently fill, which means revenue visibility stretches well into the future.
The numbers backing this up are substantial. Hyperscaler capital expenditure expectations have been increased by $130 billion for 2026, bringing total projected spending to over $650 billion through year-end.
