Intel Posts Best Day Since 1987 as Nvidia Market Cap Reclaims $5 Trillion: Is the AI Trade Overstretched?

Analysis indicates that the CPU market has suddenly gained momentum because the era of AI Agents will fundamentally reshape the ratio between CPUs and GPUs; while the demand ratio was 1:8 in the past, it is now gravitating toward 1:1. Intel, as a leader in the CPU sector, is also set to benefit.

During its latest earnings call, Intel raised its demand outlook for server CPUs, forecasting that both industry and company shipments will achieve double-digit growth this year, with this momentum expected to last through 2027.

U.S. stocks have entered the Q2 earnings season. This week, chipmaker Texas Instruments (TXN) and Intel both released strong financial results, supporting the sector's performance.

Paul Nolte, market strategist at Murphy & Sylvest Wealth Management, noted that this rally is linked to the continued heating up of AI infrastructure investment, stating, "The scale of capital investment in the AI field is staggering, and we have yet to see any signs of a slowdown."

A team of analysts at Deutsche Bank pointed out in a report that total capital expenditures for hyperscalers are expected to exceed $700 billion this year. The strong earnings and optimistic guidance from tech giants have significantly supported the current rally, reinforcing the narrative of a powerful AI-driven demand cycle.

Michael Burry, the renowned investor and inspiration for the movie "The Big Short," believes that while the narratives surrounding the massive expansion of AI data centers and chip supply shortages are strong, they are primarily driven by market sentiment rather than sustainable fundamental logic.

Whether market sentiment can remain elevated primarily depends on next week's developments regarding the U.S.-Iran conflict and earnings releases. Currently, the second round of U.S.-Iran negotiations remains inconclusive; the U.S. stated on the 24th that Iran recently signaled "some progress," and representatives from both sides have traveled to Pakistan, where further talks on a ceasefire are expected.

Regarding earnings, the four tech giants with the largest capital expenditures—Microsoft (MSFT) , Amazon (AMZN) , Google (GOOG) (GOOGL) , Meta (META) are all scheduled to release their financial reports on April 29. Investors should focus on their quarterly performance and guidance at that time, which may determine the trajectory of the chip sector in the short term.

From a technical perspective, the semiconductor index's overbought condition has reached an all-time record. The SOX index's deviation from its 200-day moving average is the highest since June 2000, and its RSI once hit 85, far exceeding extreme levels. Financial blog Zerohedge noted that positioning, fund flows, and volatility are all chasing the same direction; positioning is overcrowded, and the rally itself has become a risk.

Zerohedge believes this is no longer a pure AI bull market but a liquidity-driven AI chasing game. As prices rise, more investors are forced to buy, even as risks continue to accumulate.

Burry purchased put options on a semiconductor ETF this Thursday while simultaneously establishing put positions on NVIDIA with the same expiration. He also holds QQQ put options expiring in January and March 2027.

Prominent Wall Street financial host Jim Cramer noted on Thursday that certain market sectors, such as technology stocks, have shown signs of overheating, while share prices of many healthcare companies have pulled back to highly attractive levels. This indicates that recent capital flows in the U.S. stock market are extremely concentrated.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.