Chip Stocks Meet Harvard’s Criteria for a Bubble: Equity Insight
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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Traders work on the floor of the New York Stock Exchange.One of the hottest corners of the US stock market, chipmakers, meets the definition of a bubble as measured by professors at Harvard Business School.The semiconductors sector satisfies three criteria for a bubble based on the definition established in a 2017 working paper by Harvard Professors Robin Greenwood, Andrei Shleifer and Yang You: a two-year price return above 100%, two-year excess return over the S&P 500 of greater than 100% and five-year return of 50%, according to strategists at Ned Davis Research. The strategists warned investors in a research note Monday to avoid semiconductor stocks “when the AI trade turns south.”