Global Chipmakers Add $200 Billion In Record Rally On AI Frenzy
Global chipmakers saw their market value soar as investors rushed to get exposure to artificial intelligence, the latest sign of a frenetic bull run that is pushing tech stocks to all-time highs.
The AI-Driven Bull Run
The sector is being swept up by a wave of good news from AI companies, including ChatGPT-owner OpenAI’s record $500 billion valuation on an employee share sale and its pacts with a group of South Korean chipmakers, as well as a report that Intel Corp. is in talks to add Advanced Micro Devices Inc. as a customer.
The bullishness has pushed the combined market capitalization of the Philadelphia Stock Exchange Semiconductor Index and a gauge tracking Asia chip stocks up by just over $200 billion in the latest session, according to Bloomberg calculations.
Korean Chip Stocks Lead the Charge
Korean chip stocks were among the biggest gainers on Thursday, surging on the OpenAI deal and sending the Kospi Index to a record high. Shares of SK Hynix Inc. jumped 10%, while Samsung Electronics Co. advanced 3.5%.
Analysts say the bull run is being driven by a ‘fear of missing out’, with investors largely dismissing concerns about a bubble developing in the AI sector.
“Tech momentum shows no sign of fading — as if gravity doesn’t exist — with headwinds brushed aside and every AI headline sparking bursts of euphoria,” said Hebe Chen, an analyst at Vantage Markets in Melbourne. “Bubble talk lingers, but it’s FOMO that’s clearly running the show. Momentum looks self-sustaining until upcoming fourth quarter earnings may force the reality check.”
Valuations Soar Amid AI Frenzy
The recent rally has caused a spike in chipmakers’ valuations: Bloomberg’s Asia chip gauge is trading at around 19 times forward earnings estimates while the SOX Index is now trading at 27 times earnings, approaching record highs from 2024.
Since ChatGPT launched the modern AI era, investors have scrambled to get exposure to technology that has the potential to shake-up the global economy. They’ve piled into big infrastructure providers such as chip linchpins Nvidia Corp. and SK Hynix Inc., pushed up valuations of startups like OpenAI and Anthropic, and poured capital into all manner of gear suppliers to the AI boom.
Indian Investors and the AI Boom
Indian investors are also taking notice of the AI-driven bull run, with many looking to invest in chipmakers and other companies that are poised to benefit from the growth of artificial intelligence.
For Indian investors, the AI boom presents a number of opportunities, from investing in Indian companies that are working on AI-related projects to investing in global companies that are leading the charge in the development of AI technology.
Conclusion
In conclusion, the global chipmakers have seen their market value soar by $200 billion as investors rush to get exposure to artificial intelligence, driving tech stocks to all-time highs.
As the AI boom continues to gain momentum, Indian investors will be watching closely to see how they can benefit from this growth. With the potential for significant returns on investment, the AI boom is an opportunity that Indian investors will not want to miss.
For more information on the AI boom and how Indian investors can get involved, click here.
