Semiconductor Cycle: AI Capex, Memory and the SOX Trade

Nvidia CEO Jensen Huang was added at the last minute to President Trump's delegation to China for a summit with Xi Jinping. The stock moved to a fresh record high, making NVDA the first company to hit a $5.5T market cap, as traders bet on eased US-China AI trade tensions.

The Iran-Israel conflict has reduced crude flows through the Strait of Hormuz by nearly 30% in Q1 2026, the lowest quarterly level on record. This energy shock is pushing Brent crude above $95, straining global supply chains and forcing central banks to raise inflation forecasts, with consequences for consumer spending and geopolitical risk premiums.

Equities rebounded sharply as institutions stepped in to buy on weakness, particularly in mega-cap tech. SPY and QQQ posted gains on May 13 after Wednesday's PPI-induced selloff, signaling that despite concentration fears and inflation headwinds, large investors are using pullbacks as entry points.

President Trump invited NVIDIA CEO Jensen Huang to join his Beijing summit with Xi Jinping at the last minute, alongside Tim Cook, Elon Musk, and other CEOs. NVDA jumped to a $5.5 trillion market cap, the first company to reach that milestone, amid optimism over potential AI infrastructure deals and reduced trade tensions with China.

Microsoft-owned LinkedIn announced a workforce reduction of approximately 5 percent, signaling a strategic pivot away from headcount expansion toward AI-driven automation and operational efficiency. The move reflects broader Microsoft focus on generative AI capex over near-term revenue growth.

After May 13 weakness tied to inflation data, major institutions were spotted accumulating mega-cap tech names (GOOGL, MSFT, AAPL, AVGO) at lower levels. Options flow and gamma positioning suggest dip buyers are stepping in aggressively, supporting broader market breadth and index recovery.

Nvidia CEO Jensen Huang was a last-minute addition to Trump's China delegation, alongside Tesla's Elon Musk, Apple's Tim Cook, and top executives from BlackRock and Boeing. NVDA shares climbed on the news, hitting a record $5.5 trillion market cap as investors bet on normalized US-China tech trade.

Daiwa Capital downgraded AMD from Buy to Outperform while raising the price target to $500 (from $250), citing extreme valuation after a 150% surge in 60 days. The move signals caution on near-term multiple expansion despite fundamentally positive Q1 results and guidance, reflecting broader semiconductor sector overheating concerns.

NVIDIA CEO Jensen Huang and Tesla CEO Elon Musk joined President Trump's last-minute China delegation, along with Tim Cook and other top CEOs. NVDA hit a record $5.5 trillion market cap while TSLA advanced on the geopolitical symbolism, lifting tech sentiment despite broader inflation concerns.

US wholesale inflation surged in April to its fastest pace since 2022 with PPI up 6% year-over-year, driven by energy shocks. The 10-year Treasury yield hit its highest since July, reaching 5%, as markets reprice expectations for Fed rate cuts and hold duration longer. Energy-driven inflation is pressuring USD and equity valuations.

Institutional investors aggressively accumulated mega-cap technology stocks on dips following the inflation surprise on May 13, with Google, Microsoft, Apple and Broadcom seeing strong demand. The buying suggests conviction in earnings momentum and AI infrastructure thesis despite macro headwinds.

NVIDIA reached a historic $5.5 trillion market capitalisation on May 13, becoming the first publicly traded company ever to achieve that valuation. The milestone reflects relentless investor appetite for AI infrastructure plays and CEO Jensen Huang's growing stature in the Trump administration.

Jensen Huang, Elon Musk, and Tim Cook flew to China with President Trump for a summit with Xi Jinping, lifting semiconductor and EV stocks. The delegation signals potential deal-making in AI infrastructure and manufacturing, with NVDA hitting record highs and TSLA rallying.

US producer prices climbed 6% year-over-year in April, the fastest pace since 2022, driven by surging energy costs tied to the Iran conflict. The hot PPI data has forced the Federal Reserve to extend its expected pause on rate cuts, with 10-year Treasury yields hitting their highest level since July, pressuring equities and positioning for a longer-than-expected monetary hold.

NVIDIA CEO Jensen Huang was added to President Trump's last-minute delegation to China, becoming the highest-profile semiconductor executive on the trip alongside Apple's Tim Cook and Tesla's Elon Musk. The appointment lifted NVDA to a fresh record high and pushed its market capitalization above $5.5 trillion, though it also raises geopolitical questions about US AI infrastructure exports to China.

As NVDA, TSLA, AAPL, MSFT, and other Magnificent Seven names rally on geopolitical optimism and AI narratives, market breadth indicators reveal a sharp deterioration. The top 10 stocks now dominate index returns, concentrating equity exposure and raising concerns about valuation bubble dynamics amid sticky inflation and repriced rates.

NVIDIA CEO Jensen Huang, Tesla's Elon Musk, Apple's Tim Cook, and other executives joined President Trump on his last-minute trip to China for talks with Xi Jinping. The move sparked a rally in semiconductor and mega-cap tech equities, with NVDA hitting a record market cap of $5.5 trillion. Markets see the summit as a signal of reopened US-China tech cooperation.

After the hot CPI print triggered a sharp selloff on May 13, institutional buyers stepped in on May 12 to scoop up dips in mega-cap tech and semiconductor stocks including Nvidia, Apple, Microsoft, and Broadcom. The buying suggests a V-shaped recovery in risk appetite and conviction that recent weakness is a tactical opportunity.

Nvidia stock surged after CEO Jensen Huang was added to President Trump's last-minute China summit delegation, alongside Tim Cook, Elon Musk, and other Fortune 500 leaders. The move signals potential US-China détente on AI and chips, lifting semiconductor valuations and raising geopolitical risk.

US wholesale inflation accelerated in April to its fastest pace since 2022, with PPI up 6% year-over-year and core measures rising sharply. The data has spooked markets and forced the Fed to signal extended rate holds, pressuring equities breadth as investors reassess recession odds and bond yields spike.

Major tech companies are exploring investments in small modular reactors and advanced energy infrastructure to power AI data centers, as conventional grid power becomes a bottleneck. NVIDIA reported a $3.4 billion contract with IREN for cloud services, signaling that AI infrastructure capex is entering a new phase where energy supply is the critical constraint.

After a morning selloff driven by hot inflation data and higher bond yields, institutional buyers stepped in to support mega-cap tech and the broad market. SPY and QQQ recovered ground by midday, but traders are watching breadth metrics closely to confirm the rally's strength, with small-cap Russell 2000 lagging considerably.

CEO Jensen Huang of NVIDIA was added to President Trump's last-minute China delegation, alongside Elon Musk (TSLA), Tim Cook (AAPL), and BlackRock's Larry Fink. The geopolitical momentum from the Beijing summit is lifting mega-cap tech stocks, with NVDA hitting a record $5.5 trillion market cap, signaling optimism over US-China trade normalization.

A hotter-than-expected US inflation reading, particularly in producer prices, has forced investors to reprice expectations for Federal Reserve rate cuts. The 10-year Treasury yield hit its highest level since July, with the PPI rising 6% year-over-year, the fastest pace since 2022, pressuring tech equities and crypto markets as risk appetite fades.