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. \t\t<\/p>\n
The sector is being swept up by a wave of good news from AI companies, including ChatGPT-owner OpenAI\u2019s 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. \t\t\t <\/p>\n
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. \t\t\t <\/p>\n
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%. \t\t\t <\/p>\n
In Europe, chip equipment maker ASML Holding NV gained as much as 4.9% on Thursday, bringing its rise from an August trought to almost 50%. Peers including ASM International NV and BE Semiconductor Industries NV also advanced. \t\t\t <\/p>\n
Analysts say the bull run is being driven by a \u2018fear of missing out\u2019, with investors largely dismissing concerns about a bubble developing in the AI sector. \t\t\t <\/p>\n
\u201cTech momentum shows no sign of fading \u2014 as if gravity doesn\u2019t exist \u2014 with headwinds brushed aside and every AI headline sparking bursts of euphoria,\u201d said Hebe Chen, an analyst at Vantage Markets in Melbourne. \u201cBubble talk lingers, but it\u2019s FOMO that\u2019s clearly running the show. Momentum looks self-sustaining until upcoming fourth quarter earnings may force the reality check.\u201d \t\t\t <\/p>\n
The recent rally has caused a spike in chipmakers\u2019 valuations: Bloomberg\u2019s 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. \t\t\t <\/p>\n
Investor Scramble
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\u2019ve 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. \t\t\t
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After striking a non-binding framework agreement with Korean chipmakers, OpenAI\u2019s Sam Altman is next scheduled for Taipei, where he\u2019s reportedly slated to meet with Taiwan Semiconductor Manufacturing Co. and Hon Hai Precision Industry Co. The shares of both companies rose on Thursday. \t\t\t <\/p>\n
Chinese technology companies have also been on a strong upward trajectory, driven by investor enthusiasm for the country\u2019s grassroot AI advancements. Fresh impetus came from the government\u2019s announcement for increased support for the sector, alongside Alibaba\u2019s plans to ramp up AI spending and Huawei\u2019s unusual step of publicly unveiling its three-year vision for eroding Nvidia\u2019s dominance. These developments helped push the Hang Seng Tech Index\u2019s year-to-date gain to around 50%. Bloomberg \t\t\t <\/p>\n
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