Business, Finance & Tech
AI Boom Lifts Chip Stocks as Big Tech Slumps
The artificial intelligence boom continues to drive the stock market, but the rally is increasingly concentrated in semiconductor companies while several of the biggest names in technology struggle.
Nvidia shares surged 9% Thursday after the chipmaker reported strong earnings, including a doubling of sales and a bullish outlook for continued growth. The gains helped lift the broader market, with the Nasdaq up 1.57% in midafternoon trading and the S&P 500 up 0.82%.
Other semiconductor companies are also benefiting from the massive investment in artificial intelligence infrastructure. Companies producing the chips and hardware needed to power AI data centers have become some of the market’s biggest winners.
The S&P 500 has gained 13% this year, adding roughly $7.6 trillion in market value. Semiconductor stocks have accounted for about 37% of those gains, according to JonesTrading.
Micron Technology has gained 220% over the past year and surpassed a $1 trillion market value in May. In South Korea, major chipmakers SK Hynix and Samsung have helped push the benchmark Kospi index more than 120% higher this year.
Meanwhile, some of the technology industry's biggest companies have not enjoyed the same momentum.
Microsoft shares are down about 6% from their record high last October. Alphabet and Amazon remain below recent peaks, while Apple has fallen nearly 7% from a record high reached earlier this month.
The concentration of market gains in semiconductor stocks is raising concerns about what could happen if enthusiasm for AI spending begins to fade.
Analysts have compared the current AI trade to the technology mania of the late 1990s. Investors have also seen how quickly semiconductor stocks can fall when expectations aren't met. Broadcom shares dropped nearly 20% over two days in June after its forecast for third-quarter chip revenue came in slightly below expectations.
Market strategists say that doesn't necessarily mean the AI boom is about to collapse, but investors are increasingly watching for signs that companies could slow their enormous spending on AI infrastructure.
For now, chipmakers remain the clear winners. But their growing influence means any major pullback in the semiconductor sector could have an outsized impact on the broader stock market.
By: CNN Newsource
August 27, 2026
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