JPMorgan urges buying semiconductor stocks on dip, highlights Broadcom

JPMorgan’s Mid‑Year Outlook 2026 recommends that investors treat the recent weakness in semiconductor shares as a buying opportunity. The bank cites a strong backlog of AI‑chip orders and a tight supply outlook that will keep demand robust through at least 2028, and it names Broadcom a "Strong Buy" for the remainder of the year. JPMorgan estimates hyperscaler capital expenditures will exceed $650 billion by the end of 2026, providing a floor for chip revenues.

The recommendation comes amid a broader market debate. Morgan Stanley warns that chip‑stock momentum is fading and that valuation gaps between chipmakers and the hyperscalers buying their products have widened, posing a risk to price gains. Nonetheless, JPMorgan expects global equities to benefit from AI‑driven productivity gains through late 2026 and sees semiconductor makers positioned at the front of that wave. Investors are advised to monitor quarterly cap‑ex guidance from major cloud providers for signs of changing spending trends.