JPMorgan Warns Semiconductor Stocks Face Panic Selling Risk Amid Record Volatility

According to JPMorgan Chase strategists led by Nikolaos Panigirtzoglou, this week semiconductor stocks rebounded to record highs while volatility surged, triggering VaR (Value-at-Risk) impact risks. Rising volatility forces risk-sensitive investors to cut positions despite positive trading logic, accelerating self-reinforcing sell pressure and panic tantrum risks. The Philadelphia Semiconductor Index, which fell over 10 percent in early June amid AI overheating concerns, has since recovered and hit new highs, becoming the most crowded trade among fund managers, according to a Bank of America survey this week.

JPMorgan strategists also flagged elevated valuations as a challenge. Semiconductor stocks' weight in global indexes has grown six times faster than their revenue contribution, a ratio 1 times higher than the Magnificent Seven's comparable metrics, signaling price-to-earnings imbalances.