The AI chip sector shed over $1 trillion in market value in recent weeks, with the selloff accelerating after SK Hynix posted record quarterly profits that still disappointed Wall Street, a signal of how stretched expectations had become. Cloud hyperscalers including Microsoft, Amazon, and Meta continue committing hundreds of billions to AI infrastructure, while analyst consensus has actually moved upward during the correction: Nvidia’s FY27 and FY28 EPS estimates rose roughly 4%, and Micron’s current-quarter estimates jumped 41%<\/a> in just 60 days. Nvidia now trades near a decade-low forward P\/E of 21x; Micron trades at 10x forward earnings.<\/p>\n The correction’s trigger matters more than its size. This wasn’t demand destruction; it was a valuation reset driven by the gap between what semiconductor stocks were priced to deliver and what even exceptional results could justify. For any organization mid-cycle on a GPU infrastructure decision or HBM procurement, the underlying supply picture hasn’t changed. Samsung recently signaled memory shortages could persist through 2028, which means negotiating leverage in this market remains firmly with suppliers, not buyers.<\/p>\n The Zacks piece, written with the natural bullish tilt of a firm whose ratings system benefits from encouraging active investment decisions, does correctly identify something worth separating from the promotional framing: analyst estimate revisions are a more reliable signal than stock price momentum, and the divergence here is sharp. Micron’s forward EPS estimates rising 24 to 53 percent across FY26 and FY27 while its stock sold off means the market’s near-term narrative and the underlying earnings trajectory are pointing in opposite directions. That gap is real data regardless of who’s pointing at it.<\/p>\n The falsification condition for the bull case is straightforward: if hyperscaler capex guidance starts contracting in Q3 or Q4 earnings calls, the “early innings” thesis collapses fast. The spending commitments are still expanding now, which means your infrastructure roadmap isn’t yet hostage to a demand reversal. But the moment one major hyperscaler signals a pause, the supply chain that looks tight through 2028 becomes something to reassess, and the procurement timing calculus inverts entirely.<\/p>\nWhat this means for your business<\/h2>\n