Sparks are flying, innovation is in the air, and the semiconductor industry feels more chipper than ever. The sector experiences cyclical phases of chip oversupply or shortage, signaling periods of growth or decline. Currently, there’s a surge in demand for chips powering AI computing, propelling chip stocks to new highs.

• Four chip stocks, including NvidiaNVDA
  and BroadcomAVGO
  , fueled a third of the S&P 500’s gains this year. Chipmakers now represent over 10% of the index’s weight.
• The Philadelphia Stock Exchange Semiconductor Index hit a 20-year high, trading at 8x sales — more than double the S&P 500’s 3x sales multiple.

Here’s the (pricey) catch: These record highs evoke memories of the dot-com bubble peak when semiconductor and tech stocks fetched risky valuations — which Miramar Capital’s Max Wasserman called “too expensive right now” and warned that it could lead to a market selloff. Investors inNVDA

, the top-performing stock in 2023, are questioning its sustainability among escalating competition and potentially tapering demand. With these rising prices, it seems like these stocks are no longer the bargain they once were.

Read: Semiconductors may be expensive, but here are some cheaper alternatives.