Following a recent selloff, semiconductor giants saw their biggest advance since April 2025, trimming their July plunge to 21%. The Nasdaq 100 surged 3.4%, while the S&P 500 rose 1.7% and the Dow Jones Industrial Average gained 1.2%.
Microsoft Corp. was a significant contributor to the market's gains, with its shares surging 16% and adding approximately $450 billion to its market value—the largest single-day increase for any stock. Amazon.com Inc. also saw a boost, jumping in after-hours trading after reporting cloud-computing revenue that accelerated for the fifth consecutive quarter, easing investor concerns about the return on AI investments. Its AWS revenue reached $42.2 billion, a 37% increase year-over-year, surpassing expert projections of $40.6 billion. Conversely, Apple Inc. retreated after sales in China and its services business grew slower than anticipated.
Other notable chip stocks like Micron Technology soared 18.36%, AMD climbed 13.00%, SK hynix ADR surged 17.52%, and Intel increased 11.30%. Lam Research shares also popped 18%. Meta Platforms Inc. outlined commitments of almost $700 billion for future spending related to AI data centers and cloud computing, while Oracle Corp. announced an expanded partnership with Google Cloud for Gemini AI tools. Qualcomm Inc. CEO Cristiano Amon noted strong smartphone demand but highlighted rising manufacturing costs.
Despite the strong rally, analysts expressed caution. Michael Ball, Macro Strategist at Markets Live, commented, "The rebound in tech and momentum stocks looks more like a positioning squeeze than the start of a durable risk-on move." Ulrike Hoffmann-Burchardi of UBS Chief Investment Office suggested that while constructive on the AI growth story, investors should manage concentration risk by broadening exposure to defensive tech stocks. The chip sector's demand volatility, despite insatiable AI-related demand, remains a concern, making this July's slide the biggest since 2008.
