Tom Lee says the pullback in chip stocks is a buying opportunity
Semiconductor stocks have seen one-day slumps before, and usually they have become buying opportunities, a strategist says.
Microchip stocks tumbled on Tuesday, but a look at similar one-day downturns in the semiconductor sector shows the declines are often fleeting.
Tom Lee, the usually bullish head of research at Fundstrat, found 17 other examples of semiconductor stocks falling at least 6% since 2011, after the VanEck Semiconductor ETF SMH fell 7% on Monday. That exchange-traded fund is still up 73% this year, driven by the price hikes that memory chip and other semiconductor producers have been able to pass along to companies building out artificial-intelligence applications.
Lee said, in the previous 17 episodes, the median one-month gain for the stocks was 12%, with wins 88% of the time. The median three-month gain was 23%, also with an 88% win rate, and the median six-month gain was 39%, with a 94% win rate.
"In other words, these pullbacks arguably are buyable," said Lee.
The only time the pullbacks were not buyable was the 2024 to early 2025 period, but that was when visibility for AI spending was far lower than today, Lee said.
Extending his analysis to the broader market, he said there are too many "top callers" - in other words, people saying the market has peaked - which to his mind is a contrarian positive signal.
Lee also made a valuation argument, pointing out the price-to-equity ratio for next year on the S&P 500 SPX is 1 percentage point lower than it was at the start of the year.
"We believe 2026 was a year of 'E' but now there is a case for 'P/E' to expand. Thus, we remain constructive near-term," he said.
The markets
U.S. stock futures (ES00) (NQ00) were mostly higher after the 1.4% slump in the S&P 500 on Tuesday. Oil futures (CL00) fell to their lowest level since the U.S. and Israel attacked Iran. The euro (EURUSD) fell to a fresh one-year low vs. the U.S. dollar.
Key asset performance Last 5d 1m YTD 1y S&P 500 7365.46 -1.94% -2.04% 7.60% 20.90% Nasdaq Composite 25,587.04 -2.99% -4.01% 10.09% 28.50% 10-year Treasury 4.482 -1.80 -0.60 31.00 19.00 Gold 4093.3 -4.28% -8.12% -5.51% 22.31% Oil 71.75 -4.35% -19.75% 24.98% 10.50% Data: MarketWatch. Treasury yields change expressed in basis points
The buzz
Micron Technology $(MU)$ is forecast to report a nearly quadrupling of revenue after the close, though whether it can live up to expectations after a 269% share price gain this year remains to be seen. Rival memory-chip maker SK Hynix announced it will list about $30 billion worth of American depository receipts next month.
FedEx $(FDX)$ late Monday reported better-than-forecast results that nonetheless disappointed investors after a 36% stock-price rally this year.
Cerebras Systems (CBRS) shares were due to skid after the AI chip maker's first results as a public company.
Google parent Alphabet $(GOOGL)$ will join the Dow Jones Industrial Average, replacing Verizon Communications $(VZ)$, S&P Dow Jones Indices announced.
Another Dow component, Nike $(NKE)$, named Pfizer CFO David Denton to the same role at the sneaker maker. Nike also said fiscal fourth-quarter results will be "generally in line" with previous guidance, excluding the positive benefit from tariff refunds. Pfizer, for its part, had previously said Denton was going to leave.
New-home sales and leading economic indicators for May are due at 10 a.m. Results from the Treasury's auction of $70 billion worth of 5-year notes are due at 1 p.m.
The head of the International Atomic Energy Agency said inspectors will visit enrichment sites in Iran.
Billionaire Adani met Trump Jr. while facing U.S. bribery charges.
The chart
Harvard economist Rebecca Diamond dug into the "Understanding America Study" maintained by the University of Southern California - a nationally representative panel of 15,000 U.S. residents - to study the impact of GLP-1 medications popularized by the likes of Eli Lilly and Novo Nordisk. She found that women who started GLP-1 drugs saw a 29 percentage point increase in their marriage and cohabitation rate, compared to women who said they would like to start the drugs but have not. A similarly sized 27-point improvement was seen for women's employment for those who were previously not employed.
Top tickers
Here were the most active stock-market tickers on MarketWatch as of 5 a.m. Eastern.
Ticker Security name SPCX Space Exploration Technologies Corp. MU Micron Technology NVDA Nvidia TSLA Tesla TSM Taiwan Semiconductor Manufacturing Co. AMD Advanced Micro Devices GME GameStop MSFT Microsoft INFY Infosys INTC Intel
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June 24, 2026 06:45 ET (10:45 GMT)
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