Global chip stocks surged on Thursday after Micron Technology's blockbuster results reignited the AI-driven rally, as investors grew more confident about persistent demand and tightening supply.
Micron, a key supplier for Nvidia's AI chipsets alongside South Korean chipmakers, surged more than 17% to a record high. Photos by Reuters
Micron, a key supplier for Nvidia's AI chipsets alongside South Korean chipmakers, surged more than 17% to a record high after it forecast quarterly profit and revenue well above expectations.
The company, whose shares have more than tripled in value so far this year, also said its customers had committed $22 billion to lock in supplies of memory chips, underscoring how AI-driven demand is tightening the market.
The stock added roughly $189 billion in market value at a price level of $1,216.8, taking its total market capitalization to $1.39 trillion. It also briefly surpassed the market valuations of Meta Platforms and Tesla.
Other U.S.-listed chip stocks also rose, with storage and memory rivals Western Digital up 5.6% and SanDisk jumping more than 15%, while Seagate Technology rose 6.7%. The broader Philadelphia SE Semiconductor Index added 1.9%
"For the wider market, this feeds into the AI supply chain, where memory has been a source of nervousness. Greater supply visibility and continued tightness support pricing across the ecosystem, and this should go some way to abating the recent nervousness around tech," said Ben Barringer, head of technology research at Quilter Cheviot.
The rally slowed across other chip-related stocks though, with U.S.-listed shares of Arm Holdings and Marvell down over 2% each in choppy trading. Nvidia , the world's most valuable company, also fell 2.3%.
Qualcomm added 3.8% after the chip designer said it expects to generate $15 billion in sales from its data center business by 2029 as it moves beyond its core smartphone chips.
Global tech shares fell earlier this week, with U.S. chip stocks retreating from record highs as investors reassessed lofty AI-driven valuations and questioned how quickly heavy spending on data centre infrastructure would translate into profits.
Micron, a key supplier for Nvidia's AI processors and the only U.S.-based producer of high bandwidth memory (HBM) chips, said demand continues to far outstrip supply, allowing it and rivals SK Hynix and Samsung Electronics to charge a premium.
Analysts at D.A. Davidson said Micron has entered "a new era" marked by unprecedented visibility and a memory cycle that "is far from over". It bumped the stock's price target to a Wall Street high of $2,000, nearly double its last close of $1,048.51.
Tech stocks rally
In Europe, Dutch chip-equipment maker ASML, the region's most valuable company, rose 2.6% following two days of heavy losses triggered by investors taking profits after a record surge.
Infineon, STMicroelectronics and ASM International rose between 1.9% and 2.3%, helping provide the main support for benchmark indices. Europe's broader tech index rose 0.5%.
In Asia, South Korean chip heavyweights SK Hynix and Samsung Electronics closed higher at 13% and 5.3%, respectively.
"We expect tight conditions to persist beyond calendar 2027," Micron CEO Sanjay Mehrotra said, pointing to strong demand and structural supply constraints.
J.P. Morgan analysts said the company's shift toward multi-year customer agreements is "fundamentally transforming" its business model and underpinning a more durable earnings profile.
Little sign of demand destruction
J.P. Morgan said it saw little sign of demand destruction, adding that tight supply should persist and recommending investors “add on any dips”, while maintaining an overweight stance on South Korea.
"Memory shortages were triggered by the explosive need for AI factory infrastructure ... and we believe the role of memory as a strategic asset in Artificial General Intelligence remains unchanged," analysts at the U.S. bank said.
South Korea's SK Hynix also said on Wednesday it plans to raise up to $29.4 billion through a U.S. stock market listing, boosting investor expectations of a reduced valuation gap between the chipmaker and its smaller U.S. rival Micron.