The semiconductor sector is experiencing investor panic that has pulled the Nasdaq-100 down 9.7% from its record high, putting it on the brink of a correction. Yet third-quarter DRAM contracts are settling 20%-30% higher this month, with Google and Meta locking in five-year pricing agreements and no meaningful new supply expected until 2028. The dramatic debut of Chinese memory maker CXMT, up 466% in Shanghai after raising $8.6 billion, and fears over massive hyperscaler capital expenditure are driving the selloff. Moody’s estimates the six largest hyperscalers will spend roughly $785 billion this year and nearly $1 trillion in 2027, with uncertain returns on investment. Some analysts, like Wells Fargo’s Ohsung Kwon, argue the market is overreacting: semiconductors are pricing in 28% earnings growth when current growth is near 70%.
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