Investors have started looking for companies other than Nvidia to chuck their cash at to broaden their artificial intelligence bets.
Micron and Intel more than tripled in value, while AMD was not far behind. Those three companies added about $2 trillion in combined market value during the period.
They are now the 10th-, 11th-, and 12th-most valuable US tech companies, which should make some boardrooms very pleased with themselves.
Nvidia remains the biggest company by market value and is still printing ridiculous revenue growth. Even so, its shares gained only 15 per cent in the second quarter, which apparently now counts as corporate underachievement.
Its hyperscaler customers had a mixed three months. Amazon, Alphabet, Meta and Microsoft all produced different shades of AI enthusiasm and investor indigestion.
Meta’s shares fell almost two per cent, giving it the worst performance in the group. Alphabet led the pack with a 24 per cent gain, helped by investors deciding its AI story was not entirely written in a blue crayon on the back of a fag packet.
Barclays analyst Anshul Gupta wrote in a note: “The rotation out of AI hyperscalers into AI enablers has shifted investors’ euphoria into semis, driving spectacular rallies
Micron, one of the three big computer memory producers, saw its shares rise more than 240 per cent during the quarter.
That added roughly $920 billion in market value, because memory chips are suddenly the new tulip bulbs with cleaner packaging. Last week, Micron said revenue in the latest quarter more than quadrupled.
The reason was sky-high memory prices driven by AI chipmakers, who need more memory than is available. Micron’s gross margin jumped to 84.9 per cent in the third quarter from 39 per cent a year earlier.
Intel, the legacy maker of central processing units, saw its shares jump 216 per cent in the quarter. Chipzilla added $480 billion in market value, a development that would have sounded like satire not long ago.
Chipzilla is building US chip factories while benefiting from renewed demand for CPUs as more AI moves to devices. That means the humble processor, once treated like yesterday’s beige office box, has reappeared wearing an AI badge.
AMD, Chipzilla’s CPU rival, added $615 billion in value after its share price nearly tripled. Analysts previously said the quarter’s market moves could signal a “changing of the guard in AI”.
That means investors are piling into companies making semiconductors that sit around Nvidia’s chips and make the whole expensive circus work. They are betting that massive AI data centre spending will lift more companies than the usual golden child.
Other parts of the AI infrastructure chain had a lovely time too. Marvell, which makes networking gear, climbed about 200 per cent. Arm, which supplies technology and designs to other chipmakers, rose 134 per cent in the quarter.
The VanEck Semiconductor ETF rose 71 per cent in the period. That was the fund’s best quarterly performance since it started trading in 2000.
