Chip stocks experienced a significant surge, adding over $400 billion in market value, driven by optimistic forecasts from Micron Technology and Qualcomm. Micron led the rally, experiencing a 12% jump in extended trading after predicting quarterly earnings above Wall Street's expectations. This positive outlook for memory chips reflects robust demand as technology firms continue heavy investments in AI infrastructure and next-generation data centers.
Qualcomm also contributed to the investor optimism by revealing ambitious growth targets for its data center business, aiming for $15 billion in annual revenue by 2029. This strategy highlights Qualcomm's effort to diversify beyond its traditional smartphone chip business and capitalize on the expanding AI ecosystem. The positive sentiment extended to the broader semiconductor sector, with memory storage rivals Western Digital, Sandisk, and Seagate Technology all climbing over 8% in after-hours trading.
Suppliers of semiconductor manufacturing equipment, such as Applied Materials and ASML, also benefited, each rising more than 4%. This reflects investor confidence that sustained AI-driven chip demand will lead to increased spending on advanced manufacturing tools. The rally indicates a renewed wave of optimism after previous concerns that large investments in AI data centers might take longer than expected to generate significant revenue and profits.
Despite recent volatility, the PHLX Semiconductor Index has shown impressive long-term performance, up about 90% in 2026. Micron has been a standout, with its shares gaining more than 260% year-to-date even before the recent after-hours rally. This underscores the market's continued confidence in companies positioned to profit from the AI boom.
