Banking giant Morgan Stanley warns that soaring oil prices have historically put one stock group under immense pressure.
In a new episode of the bank’s Thoughts on the Market podcast, Morgan Stanley head of Asia technology research Shawn Kim says semiconductors have been hit hard during periods of rising oil prices.
According to Kim, higher oil prices typically impact consumer spending while increasing the costs of goods and services across the economy.
“History also offers some lessons learned about how technology markets react when energy prices spike. During periods of major oil price surges, such as in 2008 and again in 2021-22, semiconductor equities experienced significant drawdowns. In both cases, semiconductor stocks declined by roughly 30% before reaching an inflection point. The mechanism is fairly intuitive. Higher oil prices raise costs across the economy and can weaken consumer spending.”
In 2008, oil climbed to as high as $147 a barrel, and surged to $130 in 2022. Just last week, oil ascended to a 2026 high of $119 per barrel.
Kim also warns that higher oil prices, along with the sustained shutdown of the Strait of Hormuz, could negatively impact the AI buildout in the country.
“At the same time, companies building energy-intensive infrastructure, like large-scale AI data centers, may face higher operating costs and lower revenues. So when energy markets move sharply, technology markets often move with them. A disruption in the Strait of Hormuz wouldn’t automatically halt chip production, but it could ripple through power costs, material supply and the economics of building AI infrastructure.
And that highlights an important reality for investors. The future of technology isn’t just written in code. It’s powered by energy, by infrastructure, and the fragile global networks behind the digital economy.”
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