2026-04-24 · Hosted by Scott Wapner · CNBC

The Halftime Report committee tackled the semiconductor sector’s historic rally, with the SMH semiconductor ETF up 31% over 16 trading days — the best rolling 16-day performance in the ETF’s history dating back to the dot-com era. Tech has accounted for all of the net increase in the S&P since the Iran conflict began on February 27th, according to UBS data. Blended S&P 500 earnings growth stands at 13.2% year-over-year, on track for a sixth consecutive quarter of double-digit growth, with the “S&P 493” (excluding Mag 7) expected to deliver 15.9% earnings growth. Committee members debated profit-taking in Nvidia and ASML, while Bill Baruch added positions in Arm Holdings and Entegris. ServiceNow plunged 17% despite meeting earnings expectations, underscoring the brutal environment for software stocks. United Rentals surged 23% on strong earnings, while the White House issued a memo warning of Chinese “industrial-scale” AI model distillation campaigns ahead of President Trump’s upcoming Beijing visit.

The semiconductor rally is expanding from pure GPU plays like Nvidia into CPUs (Intel, AMD, Arm), materials suppliers (Entegris), and even commodity chipmakers (Global Foundries). Bill Baruch framed this as the “second inning” of the AI semi trade, where investors must look down the supply chain for underpriced exposure. The CPU-GPU dynamic — “brain and muscle” of the data center — suggests a structural broadening of AI infrastructure investment.

Despite meeting or beating earnings expectations, software companies like ServiceNow are being severely punished, with NOW dropping 17% after a solid 22% revenue growth quarter. The IGV software ETF had an 8-day winning streak recently broken. Josh Brown described it as a “merciless pit” where even good results with insider buying support cannot prevent sharp selloffs. The committee sees this as a bottoming process rather than a single capitulation event.

Multiple committee members are trimming positions that have run sharply — Malcolm cutting Nvidia by 50% total and exiting ASML, Bill selling Netflix to fund new positions in Arm and Entegris. This reflects a discipline of rebalancing after the historic rally rather than bearish conviction. The theme of “nobody ever went broke taking a profit” pervaded the discussion, with selectivity emphasized over blanket sector exposure.

With several Mag 7 names trading at compressed multiples (Meta at 15x, two standard deviations below average), next week’s earnings represent a potential re-rating catalyst. However, Bill Baruch flagged the risk that strong expectations are already priced into the Nasdaq’s breakout to all-time highs. The market’s reaction to Tesla’s mixed results — punishing a circumspect tone from Elon Musk — previews the high bar for satisfying investors during this earnings cycle.

The White House memo on Chinese AI distillation campaigns signals a new front in US-China tech rivalry, with punitive measures being explored ahead of Trump’s Beijing visit. This adds a geopolitical dimension to AI investment themes and could drive further reshoring of semiconductor and AI capabilities, benefiting domestic chipmakers and supply chain names.

Mike Santoli highlighted that the S&P 500 is structurally exposed to corporate CapEx and capital spending rather than consumer activity. The barbell of Mag 7 and microcaps both up 13% month-to-date reflects risk appetite concentrated in AI infrastructure and speculative recovery plays, while consumer-facing names like American Express struggle to excite despite solid fundamentals. —-

The committee remains constructive on the broader market driven by strong earnings growth and AI tailwinds, but is actively managing risk through profit-taking after the historic semiconductor rally and advocating for selectivity rather than blanket exposure.

Semiconductor overextension: SMH up 31% in 16 days is the best stretch in history; speculative behavior (Global Foundries +50% in a week) suggests froth in the sector.

Google TPU competition to Nvidia: Google’s custom chips are gaining respect as credible GPU alternatives, potentially pressuring Nvidia’s moat and 80% gross margins.

ASML demand uncertainty: TSMC signaling no need for next-generation $400M lithography machines through 2029 raises questions about ASML’s growth trajectory.

Software valuation destruction: Even companies meeting expectations (ServiceNow at 22% revenue growth) are being severely punished, suggesting structural re-rating risk for the sector.

Tesla execution risk on humanoid robotics: Manufacturing humanoid robots at scale is unprecedented, and Musk’s circumspect tone suggests timelines may slip.

Mag 7 earnings expectations priced in: Nasdaq at all-time highs with extended gains may mean strong earnings are already reflected in prices.

Microsoft Copilot uncertainty: Questions about whether Copilot is working and the revamped product strategy create headwinds for the stock.

Chinese AI distillation campaigns: Industrial-scale theft of US frontier AI models represents both an IP risk and a geopolitical flashpoint ahead of Trump’s Beijing visit.

Iran conflict and Middle East tensions: ServiceNow cited Middle East disruptions affecting deal bookings; the Iran situation continues to create background uncertainty.

Narrow market leadership: Tech accounting for all net S&P gains since February 27th echoes concentration risk concerns that have persisted for years.

Netflix content headwinds: Lapping a strong content year (Squid Game finale) creates tough comparisons, while the failed Warner Brothers acquisition leaves strategic questions.

Interest rate impact on healthcare/biotech spending: Thermo Fisher’s underperformance linked to sustained higher rates curtailing diagnostics and biotech equipment spending.

This episode was covered in today’s The Market Signal — 2026-04-24, a cross-source synthesis of multiple podcast reports.