Strategist Defends Semiconductor Rally Despite Bubble Fears: ‘Price Might Be Understanding Something You Don't Quite Get'

Fidelity strategist Denise Chisholm defended the semiconductor rally amid bubble concerns, arguing recent price gains largely reflect real earnings growth and favorable base rates. She highlighted that semiconductors are roughly 100% higher over the past year—broadly in line with earnings—and estimated ~70% odds the sector will outperform over the next 12 months. The piece contrasts today’s valuations (NVIDIA trading at trailing P/E 34, forward 26; Micron forward P/E ~11) with the dot‑com era Cisco exuberance, and cites strong revenue prints: NVIDIA $81.61B (up 85.2% YoY), Micron Q1 revenue $13.64B (+56.6% YoY), and Broadcom AI sales +106% to $8.4B. The article leans bullish on fundamentals but flags risks from rapid price moves, cyclical mean reversion and whether hyperscaler capex into 2027 holds up.