The recent surge in major Asian chipmaking stocks and Nvidia suppliers can be attributed to renewed optimism over artificial intelligence. NVIDIA Corporation (NASDAQ:NVDA) reached a valuation of over $3 trillion for the first time, surpassing Apple Inc (NASDAQ:AAPL) to become the second most valuable company on Wall Street. This surge was fueled by the market's anticipation of increased demand for artificial intelligence, especially after Nvidia unveiled its latest line of AI chips earlier in the week.
ASML Holding NV (AS:ASML), considered a bellwether for the chip industry, reportedly made positive comments concerning improving demand from its major customers, including TSMC. This boosted sentiment towards chipmakers, leading to a surge in TSMC's stock by nearly 5% to a record high in Taiwan trade. TSMC, being the world's largest contract chipmaker and a key supplier to Nvidia, also influenced gains in other Asian chipmaking stocks.
The prospect of increased demand for semiconductors fueled a broader rally in Asian chipmakers. Semiconductor Manufacturing International Corp (HK:0981), the largest chipmaker in China, saw a nearly 4% surge in Hong Kong trade. Smaller peers like Will Semiconductor Co Ltd Shanghai (SS:603501) and NAURA Technology Group Co Ltd (SZ:002371) also experienced slight gains in Shenzhen trade.
Japanese Chipmakers Also Benefit
Japanese semiconductor companies were not left behind in the upward trend, with Advantest Corp. (TYO:6857) and Tokyo Electron Ltd. (TYO:8035) experiencing gains of 5% and 4.3% respectively. Other Japanese chipmakers like Renesas Electronics Corp (TYO:6723) and Disco Corp (TYO:6146) also saw their stocks rise between 3% and 5%.
Nvidia’s Valuation Spike
Nvidia has witnessed a substantial increase in its valuation since 2023, largely due to the rising popularity of generative AI tools like OpenAI's ChatGPT. This trend has led to a surge in investments in the AI sector, benefiting Nvidia as the leading provider of advanced AI chips. The gains in Nvidia's stock have positively impacted the broader chipmaking sector, as investors believe that the growing demand for AI will drive overall chip demand and spur technological advancements.
The recent rally in major Asian chipmaking stocks and Nvidia suppliers is a reflection of the market's growing optimism towards artificial intelligence and its potential to drive increased demand for semiconductors. Positive comments from industry bellwethers like ASML Holding NV and strong performances from key players in the chipmaking industry have further fueled this optimism, leading to significant gains in stock prices across the sector. As the demand for AI continues to grow, we can expect to see further advancements and investments in the chipmaking industry, creating new opportunities for both companies and investors alike.