U.S. Semiconductor Stocks Stage Major Intraday Comeback, Lam Research Surges Over 20% to Lead Rally
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US chip stocks staged a sharp rebound on July 30 after the prior session's sell-off, with Lam Research surging over 20% on record earnings, but Goldman Sachs warns hedge-fund leverage sits at the 93rd percentile over five years — whether this bounce becomes a trend reversal remains unconfirmed.
Who is leading this rebound?
Lam Research — the largest semiconductor-equipment maker — jumped over 20% intraday. Its June-quarter revenue hit a record $6.72 billion, up 15.1% sequentially.
Management guided next-quarter revenue to a midpoint of $8.1 billion and adjusted EPS to $2.15. This means → the market is pricing in "AI is accelerating equipment demand" as a live thesis, not a projection.
Arm posted revenue of $1.29 billion, up 22% year-on-year; datacenter royalty growth more than doubled. Microsoft Azure revenue grew 43%, with 45% guided for next quarter.
AMD, Intel, TSMC, ASML, Broadcom, Nvidia, Micron and others rallied in unison. In plain terms = capital is not just bottom-fishing one beaten-down name — it is re-buying the entire AI compute supply chain.
What gives the Wall Street bulls their conviction?
Wolfe Research strategist Chris Caso argues AI chip demand will exceed supply through at least 2028; Nvidia remains his top AI-chip pick.
He notes that the feared slowdown in hyperscaler capex has not materialized. Competition around AI agents has left hyperscalers with "no option but to keep spending." This means → demand-side certainty is stronger now than three months ago, not weaker.
Morgan Stanley raised its 2027/2028 capex forecasts for the five global hyperscalers to roughly $1.2 trillion and $1.4 trillion, and revised its 2026 US big-tech capex estimate from $433 billion a year ago to $805 billion.
Why is Goldman Sachs pushing back?
Goldman's trading desk warns: global hedge-fund gross leverage hovers at the 93rd percentile of the past five years, while retail daily trading activity is more than 3% below the five-year average. In plain terms = institutions are already heavily positioned and retail is quiet — the market is short on fresh inflows.
The S&P 500 currently sits below a key trigger level for CTA strategies — trend-following quantitative systems that trade automatically. A further decline could unleash roughly $15.7 billion in US equity selling over one week, and up to $68 billion over one month.
Mutual funds and overseas investors are expected to stay on the sidelines until after the November US midterm elections. August is historically one of the weakest months for fund flows.
Is anything providing a floor?
Goldman notes that corporate buybacks are the most reliable flow source in August: roughly 31% of S&P 500 companies are currently in open buyback windows, expected to exceed 50% by next weekend and reach 90% by mid-August.
Yet Goldman concludes that buyback volume alone is not enough to push high-beta stocks to new highs. This means → buybacks can cushion the downside, but they cannot power a new leg up.
Dave Rosenberg of Rosenberg Research calls this "a feeble bounce standing on unstable footing," noting major indices remain in a "precarious technical position."
How far did semis fall — and is this bounce enough?
Wolfe Research notes the Philadelphia Semiconductor Index roughly doubled over three months, then dropped about 25% from its peak. This means → the recent weakness looks more like an expectation reset after a massive run, not a fundamental deterioration.
Caso also argues that memory tightness could extend the DRAM and NAND price upcycle to 2028 or even 2029. Wolfe simultaneously raised earnings estimates for Nvidia and Broadcom, noting Nvidia's upcoming Rubin systems and unbooked business opportunities are not yet fully reflected in consensus.
This reflects the core disagreement between bulls and bears: earnings catalysts are indeed delivering, but whether the market's structure — high leverage, weak inflows, the August liquidity desert — can absorb these positives remains an open question.
Content is for reference only, not financial advice.