Chipmaker stocks surge as investors bet on continued AI rally
Chipmaker stocks surged after recent declines—investors are buying discounted shares, betting that AI themes driving the bull market have not exhausted their potential. Lori Calvasina of RBC Capital Markets commented that strong corporate earnings also support the rally.
AI-processed from Bloomberg Tech; edited by Hamidun News
Stocks of chipmakers surged sharply after a recent decline: buyers on the dip began actively snapping up cheapened securities against the backdrop of a bet that the "AI theme," which has been driving a bull market for the past few years, has not yet exhausted its growth potential.
What Analysts Are Saying
On Bloomberg television, Laurie Calvasina, head of US equity strategy at RBC Capital Markets investment bank, spoke about market dynamics. According to her, in addition to the ongoing influence of the AI theme on the market, the bounce was supported by stronger-than-expected corporate earnings.
- The rally occurred immediately after the recent fall of chipmaker stocks
- The bounce driver — "dip buying" (buying on the dip)
- Investors' bet — on the continuation of the "AI theme" that has driven the bull market for the past few years
- Comment provided by Laurie Calvasina, head of US equity strategy at RBC Capital Markets
- Additional growth factor — stronger-than-expected corporate earnings
Why the Market Continues to Bet on AI
Starting in 2023, stocks of chipmakers — primarily companies whose processors are used for training and running artificial intelligence models — became one of the main drivers of US stock market index growth. Demand for computing power for data centers, related to the development of large language models and AI services, has led to a sharp increase in capital expenditures of major technology companies on the purchase of server equipment and chips. This is precisely why any decline in the semiconductor sector is traditionally viewed by investors as a reason to buy: the basic thesis about long-term growth in demand for AI infrastructure has changed little over the past few years.
Market critics periodically compare the current cycle of AI infrastructure investments to the dot-com bubble of the early 2000s, although rally supporters believe demand for computing power is a sustainable long-term trend rather than a speculative spike.
What This Means
The rebound in chipmaker stocks shows that the "AI trade" remains a structural theme for the US stock market: even after sharp declines, investors quickly return to buying, relying on the assumption that demand for computing power for AI will continue to grow faster than concerns about sector overheating.
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