Late data centers could leave chipmakers with a sales gap

A top strategist at UBS Global Wealth Management is warning that delays in building data centers could leave chip companies with a gap in orders. Nadia Lovell, the firm's head of global equity strategy, calls it an "air gap." She spoke on Bloomberg Surveillance.

What she is saying

Data centers are the large buildings that hold the computers behind AI and cloud services. They need chips to run. If the buildings are finished late, the chips may not be needed on schedule. Lovell says that could pressure chip inventories, prices and profit margins. Inventories are the stock a company has built but not yet sold. Margins are the share of each sale that turns into profit.

Where she sees safer ground

• She prefers compute chips over memory chips.
• She favors hyperscalers that already have capacity.

Compute chips handle the processing work. Memory chips store data. Hyperscalers are the cloud giants that run huge data centers. Her view is that firms with space already built are less exposed to construction delays.

Who it affects

Anyone who owns chip stocks, or funds and retirement accounts that hold them, could feel this. The point is that building delays can hurt prices and profits even when AI demand stays strong.

What is not known yet

The material does not say how long the delays might last, which projects are affected, or how large the gap could be. It also does not name specific companies. This is one strategist's view, not a confirmed trend.