AI bubble burst imminent? Investors bracing for semiconductor stocks crash

Group 1 - Investors are concerned about a potential crash in the semiconductor stock sector, which is crucial for the AI boom led by companies like Nvidia [1][2] - There is a significant increase in bearish bets on the VanEck Semiconductor ETF (SMH), with the skew for 90-110 strike options reaching levels not seen since mid-2024, indicating aggressive hedging against declines in chip stocks [2] - Ongoing trade wars between the U.S. and China, along with U.S. policies restricting technology exports, are contributing to uncertainty in the semiconductor sector [3][4] Group 2 - The emergence of DeepSeek, a Chinese AI startup, raises concerns about the future of AI infrastructure spending and the dominance of U.S. semiconductor firms [4][5] - Nvidia's recent stock performance has drawn parallels to the 2000 Dot-com bubble, with concerns that it may experience a similar fate as Cisco, which saw its stock plunge over 80% after the bubble burst [6][8] - Despite the risks, Nvidia's strong position in a profitable AI market and limited competition may help it sustain its value, provided that AI continues to deliver results [8]