Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, urged investors to stay cautious on semiconductor stocks as evidence mounts that chipmakers' pricing power is weakening despite the AI-driven rally. She noted that hyperscalers are re-engineering the AI data center stack to include lower-cost proprietary chips they design themselves, a familiar cycle where supply-chain bottlenecks spur engineering workarounds.

The warning coincides with SK Hynix's $26.5 billion Nasdaq debut, the largest-ever U.S. initial share sale by a foreign company. The stock has already fallen 26% from last month's peak, and Shalett described the sector as "meaningfully overbought." The Philadelphia Semiconductor Index's price-to-earnings ratio has more than tripled since 2022, reflecting optimism that may be outpacing fundamentals.

A further signal emerged from Meta Platforms, where CEO Mark Zuckerberg told Bloomberg the company is evaluating whether parts of its AI infrastructure could generate greater value by being rented to third parties. Shalett interpreted this as early evidence that Big Tech is reassessing the rate and return on massive capex commitments.

For investors, the convergence of hyperscaler in-house chip development, volatile new listings, and shifting monetization talk suggests the semiconductor upcycle may be entering a more selective phase. Valuation compression risk is rising for names without durable differentiation.