Bob Elliott
· Nonconsensus
· April 28, 2026 at 10:39
· ⏱ 4 min read
| Read on Substack ↗
Summary
Bob Elliott argues that the recent 50% surge in semiconductors is a speculative mania, not a reflection of fundamentals. He highlights that earnings expectations are driven entirely by AI capex and oil, which act as a tax on the rest of the economy, and that the narrative is fragile given deployment delays. He advises against chasing the rally.
•Semiconductors have surged 50% in a few weeks, driven by AI capex mania, not a fundamental change.
•Earnings expectations for the US economy have risen to multi-decade highs, concentrated in IT and energy sectors.
•AI capex is expected to reach ~2% of US GDP, but deployment delays may slow the boom.
•IT and energy inputs are effectively a tax on real-economy companies, making the outlook inconsistent without broader growth.
•The surge mirrors other recent manias (e.g., gold) and risks a sharp reversal when the narrative falters.
•The author concludes that those tempted to chase should sit on their hands.