Asian chip stocks saw significant gains as optimism regarding artificial intelligence (AI) investments reignited. This resurgence was primarily driven by strong performances from US tech companies and the anticipation of continued expenditure on AI infrastructure, with Alphabet's upcoming earnings report being a key focus. The Kospi, a bellwether for AI investments, jumped 6% as a consequence of this renewed confidence, with other Asian markets like Japan and Taiwan also advancing.
Several factors contributed to this positive market turn. Major memory chipmakers such as Micron, SanDisk, and Western Digital saw double-digit gains in the US, propelling the Philadelphia Semiconductor Index up by 5.21%. SK hynix's ADRs in the US also soared 13.75% to close at $171.94, leading to a more than 7% surge in its Korea-listed stock. Samsung Electronics also gained 5.60%.
Analysts are citing the unwinding of leveraged bets and a "healthy reset" in AI-related shares as reasons for the rally, rather than a fundamental breakdown in the AI investment theme. Global investment banks like UBS and Morgan Stanley have maintained positive views on AI, suggesting that recent corrections in memory chip stocks were due to hedge fund position reductions and represent buying opportunities. Many experts predict a potential August rebound for chip stocks, contingent on Big Tech earnings confirming sustained investment expansion.
The focus now shifts to upcoming earnings reports from major tech companies, particularly Alphabet and Intel, which are expected to provide clearer insights into the impact of AI spending on the tech industry. Analysts from Daol Investment & Securities and Kiwoom Securities anticipate that these reports will confirm a continued expansion of capital expenditure (CAPEX) in data centers and cloud services, reinforcing the long-term AI backdrop and potentially improving overall risk appetite in the stock market.
