The recent pullback in AI-related stocks is prompting investors to reassess whether the sector’s massive gains can be sustained. While earnings expectations remain strong, elevated valuations and shifting investor sentiment are creating a more challenging backdrop for many AI-linked companies.
BNN Bloomberg spoke with Lyle Stein, president of Forvest Global Wealth Management, who said investors should focus on valuation discipline as the AI trade matures, while also looking for opportunities in areas of the market that have been overlooked.
Key Takeaways
- Investors are becoming more selective within the AI sector as expectations catch up with valuations after substantial gains in chip-related stocks.
- Memory-focused companies remain attractive because they trade at significantly lower earnings multiples than many other AI-linked businesses.
- The South Korean market offers exposure to major memory-chip manufacturers through exchange-traded funds at relatively modest valuations.
- Healthcare is emerging as a potential value opportunity as investors rotate away from crowded technology trades.
- Higher cash levels can provide flexibility to take advantage of future opportunities after strong gains in stocks and commodities.
Read the full transcript below:
ROGER: Okay, the AI trade has been going through a rough patch, especially the chip sector. Micron, for example, was trading for $1,000 last week, then sold off along with other chip stocks. Where is it at right now? It’s at $912, so it’s off about 10 per cent, roughly. But you can see it’s up a little bit today. All of this triggered by cautious guidance and macroeconomic pressures. Should you buy on the dip, or is the AI trade showing signs of that word, a bubble? Let’s bring in Lyle Stein, president of Forvest Global Wealth Management, to talk a little bit more about that. Lyle, thanks, as always, for joining us.
LYLE: Good morning.
ROGER: All right, I’ve now seen it for a couple of days, maybe a few, a little more than that. “Bubble” is showing up. People are talking about it. Your thoughts on it?
LYLE: Yeah, bubbles are always difficult to call. The question that I think investors have to focus on is, what did we buy when we got the enthusiasm? And let’s just look at the chip stocks. I mean, they’re all up 200, 300, 400 kind of per cent over the course of the last few months. But what did we buy? And now I think investors are looking at, well, what am I really going to get? It was easy to buy on great expectations, but now expectations are not coming through as people expected.
You look at Oracle, just as an example, today. It had good numbers, but they need to raise more money. And if you raise more money, you have to earn a return on that money. These software companies, or even these hardware companies, potentially could see margin pressures going forward on the capital they’re raising. I think that’s all coming into the market.
And frankly, they’ve done so well that you take some chips off the table. Just as an example, we sold some Micron last week in and around these levels on the basis that we’ve had a spectacular move and the stocks simply look tired.
ROGER: It feels like a lot of people are thinking that. So does that mean there’s more of a downward trend still ahead for it then?
LYLE: Yeah. One of the things I learned a long time ago was ask yourself, who am I buying a share from when I buy it, and who am I selling it to when I want to get out?
We all learn, “Buy the dips. Buy when it’s panicking.” Well, that’s basically an answer to the question, who am I buying from? But now, if you’re stepping into the market, who are you buying from?
The reality is everybody knows this trade. The stocks have done spectacularly well. At the margin, people are selling. And if you didn’t buy Micron at $400 not too long ago, you’re not going to buy it at $900, down 10 per cent or 12 per cent from its all-time high. You’re not going to buy it until it probably gets back down to $400. So we’re just seeing an absence of buyers because everybody’s in, and the sellers at the margin dominate.
ROGER: All right. Are there any ones of interest, though, that you have an eye on?
LYLE: Well, actually, Micron comes to mind. It is in the hot area of the market. We own Google, and we bought Google and Micron specifically for the inference component — the notion that there’s compute in the chip world and then there’s inference, which is memory for all practical purposes. And so we’ve been playing that.
We trimmed Micron. I could buy it back lower, much lower. I would say Broadcom is another name we’ve talked about as well. Broadcom is a fine story. It doesn’t look like they need to raise money, and they’ve created a decent multiple, but the growth is spectacular.
So we’re now sorting out the chips and asking ourselves which areas we want to be in. We think memory is probably the best place to be at this point in the cycle.
ROGER: All right. And emerging markets, one that comes up, a Korea ETF that you like. Korea is not for the weak of stomach, is it?
LYLE: No. And the reason is it’s a backdoor way to buy the two largest memory manufacturers in the world, Samsung and Hynix. Very difficult shares for North Americans to buy, expensive to buy. Buying an ETF that is 50 per cent those two shares is kind of a backdoor way to get into the value side of this memory trade.
ROGER: And not too worried? I mean, it’s been meteoric for those two over the last little while. You still think there’s room to run?
LYLE: Well, it’s all been meteoric. If you’re going to play it, you want to play it for the near-term earnings.
Here’s the way we look at it, Roger. These stocks are trading at 10 times earnings. We bought them when they were five or six times earnings. The earnings, if they come through as expected, are going to be spectacular, so that’s a good thing. But you’re only paying eight times earnings as opposed to 30 times or more for other chip-related stocks. So it’s a value way to take advantage of the cash flows that will be generated by these companies in 2026, 2027 and maybe even 2028.
ROGER: All right. And out of tech for a second, Stryker is another one you’re liking right now.
LYLE: Yeah. We were looking at downtrodden stocks, and the question is, we’ve made a lot of money in names. What areas are not in favour? Healthcare comes to mind.
Healthcare, nobody really wanted. They’ve gone through struggles. Spending in the U.S. on health care, you’re not getting the government reimbursements and the like.
Stryker, being the appliances, knees and hips people, we like that business. We like the aging population theme. They’re a direct route into that, and the stock was absolutely destroyed. So when it got down below $190, we started buying. It’s a name that isn’t in the chip space. It’s a name that money can flow to, as opposed to flow from. We think the selling is over.
ROGER: All right. And just one last question. When it comes to your portfolio, cash, is it king right now?
LYLE: Yeah, we have more. We like to always have a cushion to buy two or three positions. That’s generally five to six per cent cash. But with the sale of Micron last week, and actually we trimmed some gold shares yesterday simply because we can’t quite figure out bullion, and the gold shares are levered to bullion, and we’ve done really well.
If you’ve done really well, take some money off the table and wait and see if you can figure out where the next move is going to be.
ROGER: All right. I’ve got 30 seconds. SpaceX, go! What do you think?
LYLE: Nope. No play from our front. It’s just way too soon. It needs to be seasoned for those playing.
ROGER: All right, Lyle, we’ll wrap it up there. Thanks, as always, for joining us.
LYLE: Take care.
ROGER: Lyle Stein, president of Forvest Global Wealth Management.
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This BNN Bloomberg summary and transcript of the June 11, 2026 interview with Lyle Stein are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
