Semiconductor and AI Hardware Chains Rally Amid Geopolitical De-escalation

TL;DR

According to AP and Axios, on June 18, U.S. stocks rose following a framework agreement between the U.S. and Iran on extending the ceasefire and allowing oil tankers to pass through the Strait of Hormuz, with the Nasdaq up 1.9% and stronger performance from the semiconductor and AI hardware sectors.

Geopolitical developments of this kind transmit to tech stocks, primarily through oil prices and interest rate expectations. The Strait of Hormuz is a critical artery for global oil transportation; any disruption to its passage can quickly push up oil prices and inflation expectations. Conversely, if the market prices in a scenario of restored navigation and de-escalation of conflict, the discounting pressure on high-valuation growth stocks will ease.

The easing of risks in the Middle East does not equate to an immediate improvement in AI fundamentals; it first opens a window for valuation recovery. What truly matters is which sectors capital flows into after the window opens. On June 18, the leading gains were not broadly across technology, but rather concentrated in chips, optical interconnects, storage, and certain domestic manufacturing names.

Intel was one of the most prominent trades that day. According to Reuters, Trump stated that Apple would collaborate with Intel to design and manufacture chips in the United States. As a result, Intel’s stock surged approximately 10%-11%. However, neither Apple nor Intel has officially disclosed details regarding the contract size, product categories, or timeline for mass production—making this more a reflection of policy-driven catalysts and the domestic manufacturing narrative rather than concrete fundamentals.

So the core issue with this rally isn't whether "tech stocks have rebounded," but rather the nature of the rebound: Is the market re-buying AI infrastructure orders, or is it conducting a selective valuation repair as geopolitical risks ease?

For ordinary investors, the Strait of Hormuz can be understood as the "chokepoint" of global oil transportation. If there is a risk of this passage being blocked, rising oil prices will increase inflation expectations and affect the Federal Reserve’s policy path and corporate costs. High-valuation technology stocks are particularly sensitive to this chain, as their valuations rely heavily on cash flows over many future years.

According to AP on June 15, Brent crude fell 4.8% to $83.17, returning to levels seen in early March. Kiplinger reported the same day that WTI crude dropped 4.9% to $80.75, hitting its lowest settlement price since early March. While the decline in oil prices does not indicate that inflationary pressures have been fully resolved, it is sufficient to ease market concerns about tail risks from energy shocks.

This explains why the Nasdaq and semiconductor sectors exhibited greater resilience after the news. Their rise was not due to sudden changes in individual company earnings, but rather because capital flowed back into them first following a decline in risk premiums.

However, this chain of events cannot be simplistically written as “Hormuz tensions ease, so semiconductors rise.” A more accurate statement is that the cooling of geopolitical risks provides an external environment for growth assets to rebound, but which technology sectors attract more capital still depends on whether their fundamentals can be validated.

This rally resembles a realignment within the tech stock sector.

The leadership of the semiconductor sector indicates that the market is not merely buying a single龙头, but rather re-pricing the AI infrastructure value chain. However, focusing solely on "chip prices rising" may lead to a misjudgment that AI trading has fully returned. More importantly, capital preferences are increasingly concentrated in chip manufacturing, optical interconnects, storage, equipment, and domestic production.

The underlying shift is that AI trading has moved beyond the early phase of "bigger models and more GPUs are better" into a more discerning stage. Investors are now asking not whether AI has potential, but who will generate real revenue from data center construction.

Optical interconnects and storage are gaining attention, and this is also related to this stage. Large AI clusters cannot operate solely with GPUs; they require high-speed data transmission between thousands of chips. Optical interconnects (high-speed data transmission in data centers) are like building highways for AI clusters. As demand for training and inference grows, memory bandwidth, storage capacity, and data movement efficiency will also become bottlenecks.

Astera Labs' earnings report provided the market with a more concrete metric. The company reported Q1 2026 revenue of $308.4 million, representing a 93% year-over-year increase and a 14% sequential growth. The company stated that this growth was driven by demand for its PCIe 6 product portfolio and AI interconnect solutions. Such data enables investors to more confidently believe that the AI hardware supply chain is no longer just a long-term narrative—it is already translating into orders and revenue within data center deployments.

This also distinguishes this round of trading from a pure forward-looking tech narrative. While public market sentiment can support leadership in chips and technology, “which segments funds prioritize buying” remains a market observation that requires qualified interpretation. At least from the price action, the rebound in risk appetite has not translated into indiscriminate chasing of all high-valuation assets; instead, capital appears to be focusing first on segments that can be validated by earnings reports and capital expenditures.

Intel's significant rise is most easily misunderstood.

According to Reuters, Trump stated that Apple will collaborate with Intel to design and manufacture chips in the United States. This statement directly positions Intel within the narrative of domestic chip manufacturing. For the market, this is not merely a routine customer partnership announcement, but a convergence of supply chain security, manufacturing reshoring, and U.S. chip policy.

However, this does not mean that Intel’s fundamentals have been reversed by its partnership with Apple. A more prudent interpretation at present is that Trump’s remarks provided a policy catalyst, combined with improved risk appetite in the semiconductor sector, amplifying Intel’s upside as a domestic manufacturing play. As for how much revenue this partnership will generate, whether it will enter advanced node mass production, the timeline, and whether gross margins will improve, clearer information is needed from Apple, Intel, or future earnings reports.

This precisely reflects the divergence in the current reevaluation of AI hardware. Policy catalysts can increase attention, orders and revenue can support valuations, and capital expenditures can validate the strength of the cycle. When all three occur together, stock price elasticity is maximized. However, if only policy statements exist without contract scale or financial contribution, the trade is more likely to be repriced as short-term sentiment.

Intel, optical interconnects, and storage each correspond to three distinct verification paths. For Intel, assess whether policy support and customer collaborations can translate into actual foundry revenue. For optical interconnects, evaluate whether AI cluster scaling continues to drive demand for higher bandwidth. For memory and storage, determine whether ongoing AI server orders sustain price growth and shipment volumes.

If the Q2 earnings report continues to show strong capital expenditures by cloud providers, sustained high demand for AI servers, and continued revenue growth guidance from optical interconnect and memory companies, this rally will resemble a continuation of the AI infrastructure cycle. If the data falls short of expectations, the market may reinterpret it as a valuation recovery following the easing of geopolitical risks.

The most critical misjudgment to avoid right now is mistaking a short-term window for a confirmed long-term trend.

The U.S.-Iran framework remains in preliminary stages. According to Axios, both sides have agreed to a framework for extending a 60-day ceasefire and potentially reopening the Strait of Hormuz. Markets may trade on reduced risk, but this does not mean the Hormuz risk has disappeared. Whether the ceasefire holds, whether shipping arrangements remain stable, and whether sanctions or nuclear issues disrupt negotiations again will all impact oil prices and risk appetite.

The validation of the AI hardware chain is also straightforward. In the upcoming Q2 earnings report, investors need to see whether major cloud providers continue to raise their capital expenditures, whether demand for AI servers remains strong, and whether revenue guidance from optical interconnect and memory companies continues to grow. Once capital expenditures come into question, the high valuation of the hardware chain will shift from a source of resilience to a source of volatility.

Intel adds another layer of verification. Trump’s statement alone is enough to trigger trading, but what truly impacts valuation are contract size, product categories, mass production timeline, and profit margins—not the “Made in America” narrative itself. Policy can create a pricing window, but it cannot replace financial realization.

This rally is better understood as a selective restoration of risk appetite: easing macro risks have opened a window, prompting capital to first re-enter the AI hardware chain. It weakens the extreme view that “AI trading is over,” but it’s not yet sufficient to prove that the AI infrastructure cycle is accelerating again. The answer doesn’t lie in a single day’s gain, but in whether capital expenditures, orders, and margins can continue to keep pace.