Chip stocks rocketed on Thursday after strong tech earnings from Microsoft and Lam Research sparked a widespread rally, fueling double-digit gains for hard-hit semiconductor companies.
Lam Research shares popped 20% and headed for their best day since 1999. The company posted strong earnings and guidance on artificial intelligence-driven demand. Microsoft popped 15% after signaling strong growth in its Azure business and lifting capital expenditures on robust demand. Shares headed for their best day since 2008.
Memory stocks also surged as Samsung warned the memory crunch could last into 2028. Micron and Sandisk rallied 13% and 21%, respectively. The stocks sold off in recent sessions on underwhelming results from South Korea’s SK Hynix.
Chip stocks have been one of the largest beneficiaries of the AI boom as companies invest in memory and central processing units to fuel the infrastructure buildout.
However, concerns that the spending frenzy is nearing its peak led to a selloff in recent sessions, and a more than $1 trillion wipeout in market value earlier this week.
Elsewhere, Arm Holdings gained 6% on strong demand for its first in-house chip, known as AGI CPU, as it looks to compete on physical silicon with technology giants. CEO Rene Haas said that demand for the product has surpassed $2 billion across fiscal 2027 and 2028.
“The demand for the product is great, and more importantly, I think it underpins the fact that the market for CPUs, for agentic workloads and around inference is just key, and we’re just seeing that grow,” he told CNBC on Thursday.
The iShares Semiconductor ETF popped 8%. Applied Materials and Advanced Micro Devices surged about 13% each, while Intel and jumped 12%. Marvell Technology gained 10% and Nvidia rose 2%.
