In the second quarter, the U.S. stock market saw a concentrated rally in the semiconductor sector, with capital shifting away from being solely focused on NVIDIA and beginning to flow into a broader range of AI-related chip companies. Micron, Intel, and AMD led the gains during this period, with the three companies collectively adding approximately $2 trillion in market value.
The three companies with the highest price increases
Among them, Micron performed the strongest, with a quarterly gain of over 240% and an added market capitalization of approximately $920 billion. Intel rose 216%, adding approximately $480 billion in market value. AMD's stock price nearly tripled, adding approximately $615 billion in market capitalization.
By market capitalization, these three companies are currently among the top U.S. tech firms, ranking around 10th, 11th, and 12th. In comparison, NVIDIA, while still one of the world’s highest-valued companies, saw a quarterly gain of approximately 15%, significantly lower than the recent catch-up rally seen in other semiconductor stocks.
Funds shift to the chip supply chain
CNBC, citing Barclays analysts, reported that market funds are shifting from AI hyperscale cloud providers to beneficiaries of AI infrastructure, leading to a significant rally in the semiconductor sector. Investors are betting that, as capital expenditures for AI data centers continue to expand, the beneficiaries will not be limited to just a few leading companies.
This rotation is also reflected in the performance of major tech stocks. Among NVIDIA’s key clients, Amazon, Alphabet, Meta, and Microsoft showed divergent trends in the second quarter, with Alphabet leading in gains and Meta posting a slight decline.
Performance and demand jointly drive
Micron's recently reported quarterly earnings reinforced market expectations. The company stated that memory prices rose significantly due to demand driven by AI chips, resulting in revenue more than quadrupling year-over-year in the latest quarter, with the gross margin for the third fiscal quarter rising to 84.9%, up from 39% in the same period last year.
Intel benefits from two key trends: continuing the construction of its domestic U.S. fabs, and a resurgence in CPU demand as more AI capabilities extend to end devices. AMD, in addition to its CPU business, has also entered the GPU market; although it still lags significantly behind NVIDIA, it is similarly included in this round of AI diffusion trades.
Semiconductor ETF reaches a new quarterly high
The rally is not limited to memory and processor segments. Network equipment maker Marvell rose approximately 200% in the second quarter, while Arm, which provides technology and design services to other chip companies, increased by 134%.
VanEck Semiconductor ETF (SMH), which tracks the semiconductor sector, rose 71% in the second quarter, marking its best quarterly performance since it began trading in 2000. This indicates that market bets on AI infrastructure have expanded beyond a single leader to encompass a broader range of the chip supply chain.