Investors on Monday appeared to be scooping up chip stocks, which have tumbled over the past month in a rapid unwinding of the artificial-intelligence trade. But experts are split over whether it’s a smart idea to jump in, as some think steeper declines lie ahead.

The iShares Semiconductor ETF, an exchange-traded fund whose top five holdings on Friday were Advanced Micro Devices, Nvidia, Broadcom, Micron Technology and Intel, was rallying 7% on Monday to bring its gain so far in 2026 to more than 45%.

Still, the ETF, which tracks an index of chip stocks, is down over 30% from its June highs. Concerns over the sustainability of the AI buildout have been top of mind, especially after the results of the midterm elections last week, which suggested a potential slowdown in data-center buildouts.

Some Wall Street analysts see the weakness in chip stocks as a classic opportunity to buy the dip, with Cantor Fitzgerald analyst C.J. Muse calling it an “early holiday gift.”

“We believe the market’s reaction to the midterms is overdone,” Morgan Stanley analyst Stephen Byrd wrote in a Sunday note. Byrd believes that the elections will result in project timelines extending to 2028 and 2029 rather than being canceled entirely. A longer buildout could have the added benefit of easing credit concerns and smoothing out imbalances between supply and demand, Byrd added.

AI spending plans remain “largely intact,” Muse said. “Within this backdrop, we would recommend being long the SOX broadly into year-end.”

Both firms view the market leaders in compute, or processing power, as the highest-conviction plays. Nvidia remains Wall Street’s favorite way to get exposure to the AI boom, even as CEO Jensen Huang’s unfolding scandal hangs over the stock. Shares of Nvidia are down 5% on Monday, with Nvidia’s board of directors launching an independent investigation of Huang’s extramarital relationship with an alleged Chinese spy.

Trading at just 9 times Nvidia’s estimated 2028 earnings, the stock is in bargain territory. Even if overall demand for chips diminishes, Muse believes Nvidia’s position as the leading provider of AI accelerators will make the company more resilient during a downturn. Nvidia’s chips lead on tokens per watt, a measure of how efficiently the chips can utilize electricity to run AI workloads.

Another popular ETF, the Roundhill Memory ETF, which focuses more specifically on memory stocks such as Samsung Electronics, Micron, SK Hynix, CXMT and Seagate Technology Holdings, has tumbled more than 30% this quarter.

After launching in April, the ETF skyrocketed more than 60% in May amid strong investor enthusiasm for the AI trade. Such strong gains in AI chip stocks earlier this year have left some investors wary about being too quick to buy.

Memory and storage stocks have suffered the most severe drawdowns of the selloff, with names like Sandisk and Seagate down over 50% from recent highs. Shares of Micron are down over 40%.

Both Morgan Stanley and Cantor Fitzgerald identified buying opportunities in Sandisk. Sandisk trades at 2.6 times estimated 2028 earnings and will generate $82 billion in free cash flow through 2028, according to Cantor Fitzgerald. Morgan Stanley highlighted that the company could use its excess cash to buy back over 50% of its stock between now and 2028, boosting earnings per share.

Micron could also repurchase a substantial portion of its stock over the next two years once federal restrictions on share buybacks under the CHIPS Act expire in December, Cantor Fitzgerald noted. Trading at just 3 times 2028 earnings estimates, Micron could benefit from significant lifts to earnings estimates.

However, others aren’t getting too excited about buying the dip in chip stocks after their big slump.

The PHLX Semiconductor Index recently broke through its 200-day moving average, a key level of support, for the first time since May 2025, Jonathan Krinsky, chief market technician at BTIG, pointed out in a Sunday note.

“Any purchases from May-October are now firmly underwater,” he said. While “similar initial cracks did see some strong bounces,” he cautioned that when the index closes below its 200-day moving average for the first time in at least three months, “50-day returns are actually negative.”

As chip stocks rallied on Monday, Krinsky also raised doubt over nearer-term performance, calling those potential gains a “coin-toss.”

As brutal as the recent selloff in chip stocks was, the PHLX Semiconductor Index still has year-to-date returns exceeding 40% as of Monday afternoon. Investors had earlier in 2026 piled into shares of companies seeing heavy demand for chips needed in the AI buildout.

“Chip stocks are already priced as if everything is already fabulous,” Rob Arnott, founder and chairman of Syzygy Asset Management, said in an interview Monday. But “the monetization of AI has been hard. It hasn’t really happened yet.”

Regarding the PHLX Semiconductor Index, Krinsky cautioned that “ultimately, we continue to think a move back to the April breakout point” of about 8,000 to 8,300 “is necessary, as that would completely retrace the parabolic advance.”