The big selloff of chip stocks was a bit excessive — at least that’s what Jefferies and Bank of America analysts think.

“We believe the Bloomberg story on potential China restrictions is unsubstantiated and the market reaction is overdone,” Jefferies analyst Janardan Menon wrote in a research note Thursday. He’s referring to the hits taken by TSMC, Nvidia, ASML, Tokyo Electron, Arm, and Applied Material shares directly following reports of tough-on-trade sentiments from the Biden administration and comments on Taiwan from former President and Republican nominee Donald Trump.

Bloomberg reported Wednesday that the Biden administration is considering severe trade restrictions if firms like Tokyo Electron and ASML Holding continue to provide China access to their advanced semiconductor technology; it would mark the U.S. government’s latest attempt to curb shipments of such technology to China. And Donald Trump said in an interview with Bloomberg Businessweek that he believes Taiwan should pay the U.S. for its defense. By the end of the trading day Wednesday, the PHLX Semiconductor Index (SOX) had fallen nearly 7% — its largest single-day drop since the beginning of 2020.

“Media blamed geopolitical headlines for the selloff, but our analysis indicates potential impact will be limited,” Jefferies’ Will Beavington said in a separate note.

Bank of America’s Vivek Arya echoed the sentiment that the market’s reaction to the geopolitical news was overblown. The semiconductor industry is no stranger to volatility, Bank of America analysts noted. While yesterday may have been the SOX’s worst day since 2020, the index has seen single-day declines of more than 5% a total of 26 times over the past decade and usually rebounds quickly, Arya wrote.

And Beavington said that the global tech stock selloff was more likely due to fears over AI demand than geopolitics. But analysts don’t seem to believe that concerns over AI demand are well founded, at least for now. TSMC on Thursday reported second-quarter revenues 40% higher than the same period last year, driven by AI chip demand. Nvidia shares began recovering, up 2% in midday trading Thursday. And Jefferies reiterated its buy rating of ASML, seeing the company’s stock price rising nearly 30% over the next year.