Tech investor Dan Niles isn't hitting the panic button on AI chips. Over the weekend, he described last week's selloff in semiconductor stocks as a temporary "speed bump" rather than the end of the AI rally. In a post on X, Niles noted that AI-related names underperformed even as the broader market pushed higher, but he's sticking with his bullish stance for now.

What's Behind the AI Chip Selloff?

Niles pointed to two main culprits. First, there's chatter that Apple Inc. (AAPL) could get the green light to source memory chips from China. That would be a win for Apple but a potential headwind for non-Chinese memory suppliers, which partly explains the weakness. Second, Meta Platforms (META) is reportedly mulling a public cloud offering to monetize its excess AI computing capacity. While that initially cheered investors, it also raises the specter of even more capital spending down the road.

"My plan is to remain bullish on the diversified market during this seasonally favorable period until big cap earnings begin in late July," Niles wrote.

Nvidia's Vera Rubin: A Memory Hog That Keeps the AI Story Alive

Despite the near-term noise, Niles is optimistic about memory-chip makers over the longer haul. He highlighted Nvidia Corp.'s (NVDA) upcoming Vera Rubin AI platform, which he says will require "at a minimum over 3x more memory than a Blackwell platform." That kind of demand doesn't just disappear, and Niles argues that any further declines in memory stocks could be a buying opportunity.

He also believes Apple will likely secure at least a partial exemption to buy some memory from China, citing inflation concerns and CEO Tim Cook's track record of getting favorable policy outcomes.

Why Niles Isn't Calling the Top

Niles isn't blindly optimistic. He flagged several risks that could pressure AI spending later this year, including more efficient AI models that need less computing power, rising competition from low-cost open-source models, and increasing semiconductor costs. But he's not ready to throw in the towel.

"I do not believe we have seen THE TOP but are just in the process of a speedbump," Niles wrote, drawing a parallel to the late-1990s internet infrastructure boom, when semiconductor stocks took steep hits before climbing much higher.

Price Action: On Thursday, Apple shares jumped 4.84% to close at $308.63, while Nvidia slipped 1.39% to $194.83 and Meta dropped 4.90% to $582.90, according to market data.