Paul Markham, head of global equities at GAM Investments, delivered a blunt message to investors watching semiconductor shares: stay away for now. Despite the recent selloff, chip stocks haven’t shed enough froth to present a bargain, with crowded positioning pushing the risk even higher.
Investor Positioning Holds the Key
Markham’s concern centers not on the fundamentals but on how many investors are still packed into the same crowded trade. The chip sector remains heavily owned by players piling in together, increasing the odds that prices could slide further before value emerges. Earlier this year, back in February 2026, he warned about the risks linked to AI hardware stocks and the soaring capital expenditures from major tech firms. The problem then was familiar Big Tech’s AI spending outpaced actual revenue generation, creating uneven market expectations.
Ripple Effects on Crypto and Beyond
What stands out is Markham’s silence on crypto tokens tied to AI themes, suggesting institutional analysts still view AI infrastructure through the lens of traditional semiconductor markets, rather than token ecosystems. Meanwhile, TSMC’s plans for increased US investments reflect broader geopolitical shifts reshaping chip supply chains, with governments funneling subsidies into domestic production. As the traditional chip trade struggles to unwind fully, its crypto counterparts, usually less liquid with wider spreads, face amplified volatility and slower rebound potential.
Markham’s earlier doubts about AI infrastructure spending also imply a possible pullback from Big Tech. If spending slows, it will ripple from GPU manufacturers to data centers, cloud platforms, and ultimately impact decentralized networks competing in the same market slice.
This content is for informational purposes only and should not be taken as financial advice.
