Chip stocks have been partying like it’s 1999 lately. That might be a bad sign for investors.

Yesterday, Qualcomm notched its fifth straight gain, soaring 41% in its best five-day stretch since 2019. Meanwhile, Intel and AMD also hit record highs after surging 93.35% and 89.95%, respectively, over the past month.

But today, the trade started to overheat: Qualcomm tumbled 11.46%, Intel fell 6.82%, and AMD lost 2.29% as investors took profits after one of the market’s hottest runs in recent memory. The selloff arrives at a time when many on Wall Street are worried that the AI-fueled chip frenzy is beginning to resemble another period of runaway tech enthusiasm: the late 1990s dot-com bubble.

Bubble trouble?

There are some obvious causes for concern. The market is looking extremely concentrated right now, with a tiny group of stocks doing most of the heavy lifting: While the S&P 500 keeps hitting record highs, fewer than 60% of stocks are meaningfully participating—a setup last seen during the late stages of the dot-com boom, according to Bespoke Investment Group.

That’s led some high-profile bears to sound the alarm. Michael Burry recently urged investors to reduce exposure to tech stocks, comparing the recent rise in the Philadelphia Semiconductor Index—which has climbed 63% in 2026—to the run-up that preceded the collapse of tech stocks in 2000.

Still, bulls argue today’s environment looks far less speculative than the dot-com era. The Nasdaq has doubled over the past three years, which is impressive, but still well below the late 1990s surge when it tripled in just 18 months. Consumer confidence is also far weaker today, and IPO speculation remains nowhere near dot-com-mania levels.

The investor playbook

It’s important for investors to understand how exposed portfolios have become to the AI trade. Semiconductor stocks now make up roughly 18% of the S&P 500, while more than half the index is tied to AI in some form. If you believe the rally still has room to run, that’s great news—there’s no sign of the AI boom running out of gas just yet. But if you’re worried about putting all of your eggs into the AI basket, it might be time to diversify.

As for the chipmakers leading the charge, analysts at Deutsche Bank reiterated a Hold rating on Intel this week, arguing the stock’s recent rally already reflects much of the optimism surrounding its foundry business. Analysts at KeyBanc Capital Markets also noted that notebook computer shipments fell 27% in April from the prior month, a potentially negative signal for PC-exposed chip companies like Intel and AMD.

Whether you’re a bull or bear, when every portfolio starts looking like an AI ETF, holding a little extra cash suddenly doesn’t look so boring.—SY

🟢 What’s up

• Wendy’s gained 16.86% after reports that investor Nelson Peltz is exploring a potential take-private deal.
• Uniform supplier Vestis rose 29.03% after beating fiscal second-quarter expectations and raising its 2026 EBITDA outlook.
• Zebra Technologies jumped 11.44% following a strong quarter, with investors looking past near-term margin pressure from memory chip costs.
• Quantum Computing surged 15.72% after revenue jumped sharply thanks to its acquisition of Luminar Semiconductor in February.
• Venture Global climbed 14.2% on an earnings and revenue beat, benefiting from stronger LNG demand amid Middle East supply disruptions.

What’s down

• Hims & Hers Health plunged 14.1% after reporting a wider-than-expected quarterly loss and issuing weak guidance.
• Under Armour fell 17% after posting a larger-than-expected loss, warning that tariffs and inflation are driving up costs.
• ZoomInfo Technologies tumbled 32.78% after slashing full-year guidance.
• GitLab slid 9.98% after unveiling an AI-linked restructuring plan that includes reducing its global operating footprint by 30%.
• AST SpaceMobile declined 11.62% after weaker-than-expected first-quarter results offset reaffirmed full-year guidance.

In case you haven’t heard, hyperscalers are spending a lot of money on AI these days. Meta Platforms, Microsoft, Amazon, and Alphabet shelled out about $427 billion in capital expenditures last year, and Bank of America says that number will grow to over $800 billion this year.

So far, investors have seen that spending spree as a good thing: More money fueling datacenter builders, chip manufacturers, energy producers, and various parts of the AI trade has helped propel the market to new heights. But analysts at Goldman Sachs warn that hyperscaler spending is sapping their ability to buy their own stocks.

“Increased hyperscaler capex has come at the expense of buybacks, which fell by 64% year/year for the group during 1Q,” analysts wrote. “The hyperscalers now allocate 20% of total spending to buybacks and dividends compared with an average of 34% from 2017-2022.” In fact, the Financial Times reported that Meta Platforms completely stopped its buyback program six months ago, while Alphabet didn’t buy any of its own shares in Q1 for the first time since 2015.

Buybacks bolster stock prices, and reducing them removes that reinforcement. It may not matter when a smaller company stops buybacks, but when the largest companies on the market cut that support, the entire market feels the loss as well.—MR

Get your popcorn: An insider-trading scandal decades in the making is captivating Wall Street.

The story sounds like an episode of Suits: A group of lawyers, with a man named Nicolo Nourafchan as the ringleader, allegedly tipped off traders in Florida, New York, Russia, and Israel about M&A deals, through a web of friends, siblings, coworkers, and even a hairdresser. They used meme-filled groupchats and some creative codewords, in one instance referring to a company preparing to reveal its merger plans as a “rabbi” preparing for “surgery,” according to the Wall Street Journal.

The lucrative scheme first came under scrutiny when the FBI noticed unusual trading activity: suspiciously timed winning trades right before major acquisitions that were handled by the same Boston-based law firm, Goodwin Procter, where—you guessed it—Nourafchan worked.

Nourafchan was arrested last week, and 29 other defendants have been charged so far, including several M&A lawyers at elite firms.

The makings of an illegal enterprise

If you’re wondering why lawyers, of all people, would commit such a brazen crime, then you’ve never met a lawyer and witnessed the hubris firsthand.

Nourafchan started the illegal side hustle when he first gave a trader in Russia information about a healthcare deal and ad-tech buyout over a decade ago. Over the course of the scheme, he recruited other corporate lawyers, and gave traders tips on over a dozen M&A transactions, including Amazon’s acquisition of iRobot, and Burger King buying Tim Hortons.

Nourafchan wouldn’t actually make the trades himself, but would tip off a network of traders, who would then give him lucrative kickbacks. For example, after a group of traders made roughly $90,000 from Nourafchan’s tip about an Amazon acquisition back in 2020, he got a $9,765 wire transfer.

Traders praised Nourafchan’s access, and one even called the method “genius” in a phone call, according to the WSJ. He’s probably rethinking that word right about now.—LB

• Surprise, surprise: eBay just rejected GameStop’s $56 billion takeover offer.
• The Senate officially confirmed Kevin Warsh as a Fed governor, clearing another hurdle for him to take over from Jerome Powell.
• New data from Novo Nordisk showed that its high-dose Wegovy drug helped patients lose an average of 21% of their weight, up from the 17% average its previous dose boasted.
• Sam Altman testified in court today that Elon Musk’s departure from OpenAI was a “morale boost.”
• Samsung and its labor union failed to ratify a new pay agreement, setting the stage for a strike later this month that could kneecap the AI chipmaker.
• SpaceX and Alphabet are reportedly in talks to put data centers into orbit.

Economic reports: Inflation remains in the hot seat with the April PPI report.

Earnings announcements: Tencent, Cisco, Alibaba, Siemens, SoftBank, USA Rare Earth, StubHub, WeRide, and Birkenstock.

Everything else: President Trump’s summit with Chinese President Xi Jinping begins in Beijing, with everything from trade wars to real wars up for discussion.