Qualcomm Inc (QCI.MU)

AI investments will help chip sector to recover: Analyst

The semiconductor sector is undergoing a correction as interest rate cut expectations dwindle, prompting concerns about the impact on these high-growth, technology-driven stocks. Wedbush Enterprise Hardware Analyst Matt Bryson joins Yahoo Finance to discuss the dynamics shaping the chip industry. Bryson acknowledges that the rise of generative AI has been a significant driving force behind the recent success of chip stocks. While he believes that AI is shifting "the way technology works," he notes it will take time. Due to this, Bryson highlights that "significant investment" will continue to occur in the chip market, fueled by the growth of generative AI applications. However, Bryson cautions that as interest rates remain elevated, it could "weigh on consumer spending." Nevertheless, he expresses confidence that the AI revolution "changing the landscape for tech" will likely insulate the sector from the effect of high interest rates, as investors are unwilling to miss out on the "next technology" breakthrough. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance. This post was written by Angel Smith