Alex King highlights the potential of analogue and mixed-signal chipmakers, such as Texas Instruments, to benefit from the current semiconductor sector rotation, urging investors to look beyond traditional AI-focused stocks amid cyclical risks.
Alex King argued that investors have become too bearish on semiconductors after a sharp rotation out of the group, and he said the sell-off has created an opening in the less glamorous parts of the industry. Speaking on Seeking Alpha’s “Investing Experts” podcast, the Cestrian Capital Research founder said the recent weakness has left many retail traders bruised, while larger institutions may now be accumulating names that have been left behind.
King’s central point was that the most interesting opportunity may not be in the best-known artificial intelligence chipmakers, but in analogue and mixed-signal businesses. He said those companies matter because they connect chips to the physical world: they handle temperature, motion, power management and other functions needed for robotics, industrial systems and emerging humanoid machines. In his view, that makes the segment a quieter but potentially more durable beneficiary of the build-out in computing infrastructure and physical automation.
He singled out Texas Instruments, ON Semiconductor and Vishay Intertechnology as examples of stocks that are widely overlooked because they are harder to explain than flashier names such as Nvidia. King said Texas Instruments, in particular, stands out because of improving revenue growth, strong cash generation and a much cleaner balance sheet than it had a few years ago. He described the group as relatively close to long-term support levels, which he said allows investors to define risk more tightly with stop-losses.
King also warned that chip stocks remain cyclical, even when enthusiasm around artificial intelligence makes them appear otherwise. He said the sector could be nearing a peak margin phase if demand slows or if the current investment cycle proves less durable than bulls expect. At the same time, he argued that the broader case for hyperscaler spending has not been disproved and that large cloud operators may still earn acceptable returns on their capital spending if AI adoption keeps broadening across businesses.
Beyond the sector call, King used the interview to make a wider point about investing discipline. He said his firm stays market-neutral and watches price and volume rather than trying to predict the economy from top-down forecasts. He also urged investors to study fundamentals, technical analysis and sentiment rather than treating stocks as permanent holdings, and said the best opportunities often appear where a sector is unpopular rather than when it is already widely celebrated.
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