Wall Street banking giant picks stocks to buy after recent dip

Wall Street banking giant JPMorgan is urging investors to use the recent pullback in semiconductor stocks as a buying opportunity, arguing that the sector’s long-term growth outlook remains strong. In a note to clients, JPMorgan strategist Mislav Matejka said the bank continues to favor semiconductor stocks over other technology segments following the sector’s sharp decline in late June and early July. The strategist maintained that the semiconductor upcycle is far from over and believes meaningful new supply is unlikely to arrive before 2028, supporting the industry’s longer-term earnings outlook.

The recommendation comes after a notable sell-off across the semiconductor sector, which followed a strong rally during the second quarter of 2026. In this line, the Philadelphia Semiconductor Index (SOX) and semiconductor-focused exchange-traded funds (ETFs) recorded significant declines, while major chip stocks including Advanced Micro Devices, Intel, Micron Technology, Nvidia, and Broadcom experienced sharp pullbacks. Matejka said JPMorgan’s preferred technology exposure remains semiconductor stocks, followed by hyperscale cloud providers and higher-risk AI plays.

The bank views the recent weakness in the SOX index and Asian chip markets as a buying opportunity rather than a sign the semiconductor cycle is peaking. Magnificent Seven caution While JPMorgan remains bullish on chipmakers, it is more cautious on the Magnificent Seven, noting that concerns over AI monetization could weigh on valuations despite continued earnings growth. The bank also maintains a bearish long-term view on AI-sensitive sectors such as software, business services, and media, though it expects occasional rebounds when these stocks become oversold.

Meanwhile, the recent semiconductor sell-off was driven by concerns over AI infrastructure spending, elevated valuations, company-specific guidance, and broader macroeconomic uncertainty. Investors have increasingly questioned whether the rapid pace o