Chip Stocks Surge 780% as AI Boom Shifts from Software to Hardware
Investors are abandoning big tech companies and pouring money into chip makers, driving some stock prices up by nearly 800% in just six months.
The shift marks a major change in the artificial intelligence (AI) boom. While software giants like Microsoft and Meta have seen their stocks fall, companies that make the physical chips powering AI data centers are seeing record gains.
In Asia, South Korea's Kospi index rose 123% in the first half of this year—its best performance since at least 1990. The jump was led by electronics giant Samsung, whose stock climbed 169%, and chip maker SK Hynix, which surged 303%. Both companies report a huge increase in demand as AI firms compete for the chips needed to run their systems [185815].
US chip makers are also booming. SanDisk shares rose 780% in 2026 and 4,510% over the past 12 months. Western Digital gained 240%, Micron rose 296%, and Seagate advanced 226% [185815].
"These four companies have generated the kind of gains in six months that you would normally expect over decades of investment," said Dan Coatsworth, director of markets at investment platform AJ Bell [185815].
The demand is so strong that Apple last week blamed higher memory chip costs for price increases on its iPads and MacBooks [185815].
Meanwhile, "hyperscalers"—companies that run the largest data centers and deploy AI services—have seen their stocks fall. Microsoft is down 24% in 2026 and hit a one-year low last week. Meta has dropped 15%. Some investors are worried about the massive spending plans these companies have announced, which increase debt and use up cash flow [185815].
South Korean chip stocks plunged Monday after Meta Platforms Inc. announced plans to sell excess computing power, raising fears that the AI boom may be creating too much capacity. Samsung Electronics and SK Hynix saw their shares drop. Meta’s move to market its spare computing capacity suggests that some companies are already building more AI infrastructure than they need [186751].
A selloff in semiconductor stocks also spread to South Korea on Wednesday, reviving fears that the blistering rally in AI shares may have gone too far, too fast [186745].
"There is a desire to protect gains, and investors are in a 'sell first, ask questions later' mode," said Chris Beauchamp, chief market analyst at trading platform IG [185815].
Despite this, global markets have had a strong first half of 2026. The US S&P 500 index gained 7.4% this year, closing last week at 7,354 points. Mark Haefele, chief investment officer at UBS Global Wealth Management, predicts the index will rise to 8,200 points by June 2027 [185815].
"Our base case expects continued strength in AI capital spending, a resilient US economy, ongoing fiscal spending worldwide, and solid credit creation that will keep supporting corporate profit growth and markets in general," he said [185815].