AI, memory, and chip-equipment stocks sold off 10% to 30% in two weeks, but the notes argue the underlying demand picture is still strong: ASML and TSMC both signaled 2027-2028 supply tightness, while TSMC, Micron, AVGO, GOOGL, CLS, and VRT kept posting or guiding to outsized growth. The pullback is framed as a chance to buy the whole stack, with the preference shifting toward cheaper names and ETF exposure over the most expensive AI trades. Memory is the sharpest battleground: CXMT’s 4F-squared announcement, Samsung/SK Hynix declines, and the collapse in memory stocks are contrasted with MIcron, SK Hynix, and DRAM fund data showing the cycle may still have room. The suggested response is a blended allocation across SMH, CHA, EUV, and DRAM rather than chasing single names.
AI stocks fell 10%, 20%, and 30% over the last 2 weeks, while the market treated the selloff as a sector-wide reset.
On Thu. Oct. 15, South Korea’s market fell so fast it triggered a 20-minute trading halt; Samsung and SK Hynix each lost close to $100 billion as investors feared China is catching up in memory and AI spending won’t pay off.
ASML posted record sales, said customers are already placing orders for 2028, and said planned supply for 2027-2028 still will not fully meet demand; memory makers were nearly half of ASML machine sales last quarter.
TSM beat its forecast one day after ASML, said next-quarter revenue should be about $53.3 billion, or roughly 58% year-over-year growth, and said growth could run even faster through 2029 because customers coordinate 2-3 years in advance.
TSM expects about $62 billion of capex in 2026, roughly 50% above last year, and said it will spend significantly more than $62 billion through 2028; gross margin slipped from 67.7% to 66.4% as the 2-nanometer ramp continues.
CHR’s data-center and communications segment was 79% of sales last quarter, revenue rose 34% year over year, and next-quarter revenue could reach $2.4 billion, implying 52% growth even though the stock is down 31% since the selloff started.
CXMT said on Sat. Oct. 10 that its first 4F-squared memory chips should launch by year-end; Samsung reportedly will not mass-produce its own version until 2028, and CXMT did not disclose speeds, capacities, or actual output.
MU posted $54.2 billion in revenue, up 379% year over year, guided to a record $61.5 billion next quarter, and now trades at just 5x forward earnings even after falling 16% since the selloff and 28% from its June high.
SK Hynix is down 28% since the selloff began and 56% from its June high, yet still makes about half the world’s high-bandwidth memory; US investors pay about 40% more for the ADR and still get only about 4.5x forward earnings.
AMAT posted record revenue of $9.1 billion, up 25% year over year, guided to about $10.25 billion this quarter for 51% growth, and trades near 22x forward earnings after falling 23% in the selloff and 43% from its high.
AVGO’s AI chip revenue hit $16.7 billion last quarter, up 221% year over year; it expects $21.7 billion this quarter, implying 236% chip-revenue growth, while the stock is down 13% in the selloff and trades at 18x forward earnings.
GOOGL’s cloud revenue grew 82% year over year to $24.8 billion, Gemini reached 950 million monthly active users, capex is about $200 billion this year versus more than double last year’s spend, and the stock is only down about 2% in the selloff.
CLS revenue grew 62% last quarter, the company expects 65% growth for the full year, and almost 2/3 of revenue comes from just three customers; the stock is flat this year but down more than 30% from its June high at about 18x forward earnings.
VRT raised full-year guidance to about 31% organic growth and lifted adjusted EPS guidance by 60%; the stock is down 19% in the selloff, down 45% from its May high, and trades around 24x forward earnings.
The suggested portfolio split is SMH 40%, CHA 30%, EUV 20%, and DRAM 10%, with a blended fee of about 0.5% per year and an average forward P/E below both the S&P 500 and the NASDAQ 100.