BofA Warns AI Chip Rally Nears Historic Bubble Levels as SOX Surges Above Trend

Bank of America strategist Michael Hartnett warned that the AI chip rally is nearing historic bubble extremes, with the Philadelphia Semiconductor Index trading 62% above its 200-day moving average as of May 15, 2026. BofA said the SOX’s deviation exceeds levels seen before the 1987 Black Monday crash and the 1929 market collapse, and is above the Nasdaq’s 55% gap before the 2000 dot-com bust. The move is approaching the 73% deviation recorded before France’s 1720 Mississippi bubble collapsed. AI-linked chip stocks including Micron Technology (MU), AMD (AMD), SK Hynix, Marvell Technology (MRVL) and Intel (INTC) have risen sharply since late March 2026. Wall Street estimates AI-related investment could exceed $1 trillion in 2027, adding to valuation concerns. Supporters cite real revenue growth: Alphabet (GOOGL) reported 63% cloud revenue growth in April 2026, Amazon’s (AMZN) AWS revenue rose 28% to $37.59 billion, and Microsoft’s (MSFT) cloud revenue rose 40% to $34.68 billion.