Shares in chipmakers underpinning AI boom rocket in first half of 2026
Rise in Semiconductor Stock Prices
Shares in chipmakers underpinning AI boom – Investor enthusiasm has propelled semiconductor and memory chip manufacturers to new heights, with their profits experiencing a significant uptick in 2026. This trend has come at the expense of certain large software firms, which have seen declining interest this year. The stock prices of semiconductor companies have skyrocketed, driven by the growing demand for hardware essential to the AI revolution. Notably, some firms have witnessed their share values triple or even more since the start of January, leading to a sharp rise in Asia-Pacific markets.
South Korean Market Gains
South Korea’s Kospi index has climbed 123% this year, marking its strongest first-half performance since at least 1990, according to Guardian analysis of data from the London Stock Exchange Group. This surge is largely attributed to the electronics giant Samsung, whose shares have increased by 169% so far, and SK Hynix, which has risen 303% since January. Both companies have reported a substantial rise in demand, as AI firms race to secure chips for their expanding datacenter operations.
Industry leaders are capitalizing on this momentum, with Samsung and SK Hynix planning to construct a combined four fabrication plants in the country’s southwest region. President Lee Jae Myung has pledged to solidify South Korea’s dominance in the sector through investments exceeding $576bn over several years, focusing on semiconductors, AI datacenters, and robotics. These strategic moves reflect the nation’s commitment to maintaining its competitive edge in the global tech landscape.
US Chipmakers Experience Remarkable Growth
Meanwhile, US-based chipmakers have also seen explosive gains. Shares in Sandisk have surged 780% in 2026, with an even more staggering 4,510% increase over the past 12 months. Similarly, Western Digital has climbed 240% this year, while Micron and Seagate have gained 296% and 226%, respectively. These figures highlight the intense market demand for semiconductor technology, as investors anticipate sustained growth in AI-driven applications.
Dan Coatsworth, head of markets at AJ Bell, noted that the extraordinary performance of these stocks represents “kind of gains in six months you might normally expect over decades with investing.” He attributed the surge to a combination of factors, including constrained supply and rising demand for memory chips. “Higher selling prices and greater demand is a powerful cocktail for explosive earnings growth,” he added, emphasizing the industry’s resilience amid economic uncertainties.
Investor Dynamics and Market Shifts
As AI adoption accelerates, investors have increasingly prioritized hardware over software stocks, leading to a notable shift in portfolio allocations. This has been evident in the declining fortunes of major software companies, which have lost favor compared to semiconductor firms. For example, Microsoft’s share price has dropped 24% this year and reached a one-year low last week. The trend suggests a broader reallocation of capital, with investors favoring tangible assets over the volatility of software-driven markets.
Some market analysts warn that the current enthusiasm may be overextended. The massive spending plans of leading AI companies have raised concerns about their financial sustainability, prompting higher borrowing and increased capital intensity. Chris Beauchamp, chief market analyst at IG, observed that “having piled in to AI and tech since the end of March, there is a desire to protect profits, and investors continue to be in a mood to sell first and ask questions later.” This sentiment has led to recent dips in chip stock prices, as investors rotate out of the sector and into other industries.
Market Trends and Broader Impacts
Despite the volatility in tech stocks, overall market performance has remained robust. Japan’s Nikkei index has gained 38% in the first half of 2026, while the UK’s FTSE 100 has climbed 5.8%. The London market, however, has been influenced by takeover activity, with companies like Beazley, DCC, Glencore, Schroders, Segro, and Intertek receiving merger proposals. These deals have provided a counterbalance to the sector-specific fluctuations in chip stocks.
Global energy markets have also mirrored the tech boom, with Brent crude oil prices rising from $60 a barrel at the start of the year to approximately $12 higher by June. This increase was exacerbated in April when the closure of the Strait of Hormuz triggered supply shortages, doubling oil prices to over $120. The surge in energy costs has further tightened supply chains, indirectly fueling demand for semiconductor components in datacenters and manufacturing.
The US S&P 500 index has gained 7.4% so far in 2026, reaching 7,354 points at the end of last week. Mark Haefele, chief investment officer at UBS Global Wealth Management, predicts the index will continue its upward trajectory, potentially surpassing 8,200 points by June 2027. His forecast hinges on sustained AI capital expenditure, a resilient US economy, and ongoing fiscal stimulus worldwide. However, the recent rotation out of tech stocks raises questions about whether the market can maintain its momentum as the second half of the year approaches.
Corporate Strategies and Global Competition
Apple, a key player in the tech ecosystem, has cited the rising cost of memory chips as a factor in its recent price adjustments for iPads and MacBooks. The company is also reportedly seeking approval from the Trump administration to purchase chips from CXMT, a Chinese firm blacklisted by the Pentagon. This move underscores the geopolitical tensions shaping supply chains and the strategic importance of securing semiconductor resources.
As the AI boom continues to reshape industries, the semiconductor sector remains at the forefront. While the current market conditions reflect a strong demand for hardware, analysts caution that this may not be sustainable without corresponding supply advancements. The competition for chips has intensified, with major players vying for dominance in a rapidly evolving technological landscape. This dynamic is expected to influence stock prices and investor sentiment in the coming months.
Overall, the surge in chipmaker stocks highlights the critical role of semiconductors in the AI economy. However, the interplay between demand, supply, and geopolitical factors will determine whether this trend persists or gives way to a more balanced market. Investors, meanwhile, remain watchful, balancing optimism with the need to hedge against potential corrections in the tech sector.
