Shares of chipmakers are rallying this year
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While the AI spending boom is fueling big gains for lots of tech companies, it’s the semiconductor makers that are truly in the chips these days.
Case in point: Semiconductor stocks as a group* are up 55% so far this year—outpacing the “Magnificent” 7’s year-to-date return by 48% (see the chart). Additionally, the current quarter has been the best for the semiconductor sector since late 2001, and it’s only halfway over.
A big reason: Advanced semiconductors are crucial to addressing bottlenecks in AI networks, thereby helping ensure that the massive investments companies are making in AI pay off. While Nvidia has long been the face of the AI chip boom, investor enthusiasm is increasingly broadening across the semiconductor landscape, with companies like Intel and Micron each up more than 150% YTD, versus roughly 20% for Nvidia.
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The upshot: AI is creating the biggest demand spike the semiconductor industry has seen in decades, and active management strategies appear poised to capitalize on navigating these complexities as the AI theme matures.
* As measured by the MVIS U.S. Listed Semiconductor 25 index
More from: Horizon Investments
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