How long will the cyclical semiconductor boom last?

High spending by AI companies has positioned semiconductor stocks for another excellent year, bouncing back from April’s tariff-fuelled losses. Morningstar’s Global Semiconductors Index is up 34% this year, with Nvidia up by one-third. This level of spending is set to continue, with AI chip revenue set to quadruple over the next few years. Despite this positivity, concerns remain over AI growth projections and whether valuations are inflated. Spending by companies could reach heights that outpace growth. Also, the semiconductor industry has historically been cyclical, and whilst it is currently...