U.S. semiconductor and artificial intelligence (AI) stocks surged again, buoyed by renewed optimism over AI investment. Following Nvidia's strong earnings, expectations for expanded AI infrastructure investment have revived, drawing capital into memory chip and AI server-related stocks.
On Wednesday (local time), Micron Technology's share price jumped 19%, surpassing $1 trillion in market capitalization for the first time.
Investment bank UBS raised its price target on Micron more than threefold, from $535 to $1,625, citing increased potential benefits from the expansion of long-term supply contracts. UBS estimated that Micron shares still have more than 100% additional upside potential.
Micron had been weak earlier in the week as profit-taking spread across memory chip stocks. However, the share price rebounded sharply as expectations for expanding AI memory demand came back into focus.
Other memory chip stocks also rose in tandem. Memory storage maker Seagate Technology rose 4%, and Western Digital climbed 8%. The Roundhill Memory (DRAM) ETF gained 14%, setting a new all-time high. The Philadelphia Semiconductor Index (SOX) also climbed 4.2% to a record high.
Major AI chip stocks also showed strength. While bellwether Nvidia slipped 0.22%, AMD rose 7.8%, Intel gained 3.1%, and Broadcom climbed 1.9%.
Expectations for expanded AI infrastructure investment have been growing again in the market. In particular, optimism over demand for data centers, AI servers, and memory chips has spread rapidly following Nvidia's strong earnings.
Reuters reported that investors are also paying attention to potential initial public offerings (IPOs) of large privately held AI companies such as SpaceX, OpenAI, and Anthropic.
"This year's tech stock rally is reminiscent of the dot-com bubble of the late 1990s," said Chris Zaccarelli, chief investment officer at Northlight Asset Management. "But the lessons investors learned from the bubble's collapse 25 years ago could also prevent the same mistakes this time around."
