Wharton’s Jeremy Siegel: another tech bubble ‘may be forming’

“The beginnings of a speculative bubble may be forming but it is impossible to tell when it will end,” Siegel wrote in his weekly WisdomTree commentary Monday.

Siegel, who retired from Wharton last week after a 45-year career as a finance professor, pointed to the meteoric rise in semiconductor stocks—which are seen as the vendors of the “pickaxes and shovels” of the AI revolution—as one example of bubble-like market behavior. To his point, the iShares Semiconductor ETF (SOXX), which tracks U.S.-listed chip stocks, has soared over 57% in the past 12 months alone.

“It is impossible to tell,” Siegel wrote, “whether semiconductors’ action today is akin to 1997-98 and the internet—or more like 1995, like tech bulls think. Or 2000, like bears think.” He compared the current rise of chip stocks to the internet darlings during the dot-com era.

The former professor did admit that tech stocks are “expensive” in general, but he also noted there’s a reason for that—earnings growth. As of last week, after 80% of S&P 500 constituents reported fourth quarter earnings, the tech sector saw earnings growth of more than 20% year-over-year, according to Fisher Investments.  Wall Street expects that trend to continue as well, with analysts forecasting 17% year-over-year EPS growth and 9.1% revenue growth for the sector in 2024, according to Charles Schwab. 

Nvidia, the special one

Despite strong tech earnings, some analysts have argued that the meteoric rise of Nvidia, the semiconductor and graphics processing unit (GPU) giant, is evidence that a tech bubble is already…