What Happened?
A number of stocks jumped in the afternoon session after the semiconductor sector rose buoyed by robust AI-related demand and a strong global sales outlook.
Global semiconductor sales are on a significant upward trend, projected to surpass $1 trillion this year, largely driven by widespread AI infrastructure and data-center needs. This surge in demand is already translating into tangible results for companies in the sector.
For instance, ChipMOS reported a 32.2% year-over-year revenue increase for April, citing a 'persistent AI-related demand/supply imbalance.' Further underscoring the industry's expansion, companies like Advanced Semiconductor Engineering are collaborating to build new state-of-the-art manufacturing facilities to meet the growing needs for high-performance computing (HPC) chips, which are essential for powering advanced AI applications.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Processors and Graphics Chips company Qualcomm (NASDAQ: QCOM) jumped 7.4%. Is now the time to buy Qualcomm? Access our full analysis report here, it’s free.
- Memory Semiconductors company Micron (NASDAQ: MU) jumped 14.5%. Is now the time to buy Micron? Access our full analysis report here, it’s free.
Zooming In On Micron (MU)
Micron’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. But moves this big are rare even for Micron and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 3.2% on the news that strong earnings results from industry leader Intel and positive industry-wide forecasts boosted the broader semiconductor sector.
Investors were particularly encouraged by a 22% growth in Intel's data center business, suggesting that the AI-driven demand for hardware is finally translating into a significant recovery for central processing units (CPUs) and advanced packaging services. The rally quickly spread across the broader semiconductor sector, lifting peers like AMD, Qualcomm, and ARM by over 10%. This industry-wide lift reflected a growing market consensus that the "AI trade" was broadening beyond Nvidia's specialized graphics chips to the wider silicon ecosystem. Adding to the positive sentiment, research firm Omdia significantly raised its semiconductor revenue forecast for 2026, citing a surge in demand for memory and data storage components driven by artificial intelligence.
Micron is up 137% since the beginning of the year, and at $747.19 per share, has set a new 52-week high. Investors who bought $1,000 worth of Micron’s shares 5 years ago would now be looking at an investment worth $9,242.
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