Micron, Intel and AMD add $2 trillion in Q2 chip rally

Memory maker Micron Technology Inc. surged more than 240% in the second quarter, leading a historic semiconductor rally that added roughly $2 trillion in combined market value to Micron, Intel Corp. and Advanced Micro Devices Inc.

"The rotation out of AI hyperscalers into AI enablers has shifted investors' euphoria into semis, driving spectacular rallies," Barclays analyst Anshul Gupta said in a note Tuesday.

Micron added about $920 billion in market capitalization after its stock more than tripled. Revenue in the latest quarter more than quadrupled as memory prices surged from AI chip demand, and gross margin jumped to 84.9% from 39% a year earlier. Intel rose 216%, gaining $480 billion in market value, while AMD climbed 186% and added $615 billion. Nvidia, the dominant AI chipmaker, gained just 15% in the period.

The rotation signals a broadening of the AI trade beyond Nvidia as investors bet that massive capital expenditure on AI data centers will lift a wider range of companies. Other infrastructure plays also boomed: Marvell Technology Inc., which makes networking gear, climbed about 200%, and Arm Holdings Plc rose 134%. The VanEck Semiconductor ETF posted its best quarterly performance since inception in 2000, rising 71%.

Memory and CPUs Lead the Rotation

Micron, one of three major producers of computer memory, benefited from skyrocketing prices for high-bandwidth memory used in AI accelerators. The company's gross margin more than doubled year-over-year, reflecting pricing power in a market where demand for HBM — high-bandwidth memory, a critical component in Nvidia's GPUs — has outstripped supply. Memory prices have climbed for four consecutive quarters as AI chipmakers compete for limited HBM capacity from suppliers like SK Hynix and Samsung.

Intel, the legacy maker of central processing units, jumped as the company builds US chip factories while benefiting from renewed demand for CPUs as AI workloads move to devices. The chipmaker's foundry business, a centerpiece of CEO Pat Gelsinger's turnaround plan, has secured commitments from several unnamed customers, though it remains years away from challenging TSMC's manufacturing dominance.

AMD, Intel's rival in both CPUs and GPUs, also surged, though it remains far behind Nvidia in the data center GPU market. The company's MI300 series accelerators have gained traction with cloud providers seeking an alternative to Nvidia's H100, but AMD's data center GPU revenue is a fraction of Nvidia's $47.5 billion quarterly run rate.

Among the hyperscaler customers that drive AI chip demand, results were mixed. Alphabet Inc. led with a 24% gain, while Meta Platforms Inc. fell almost 2%, the worst performance in the group. Amazon.com Inc. and Microsoft Corp. also posted gains but lagged the semiconductor rally.

For investors, the rotation into semiconductor enablers reflects a maturing AI thesis. While Nvidia trades at elevated multiples reflecting its dominant position, the broader chip ecosystem is capturing a growing share of AI infrastructure spending. Micron's memory pricing power, Intel's foundry ambitions and AMD's GPU push each offer distinct exposure to the AI buildout — but the rally has also pushed valuations to levels that leave little room for execution missteps. The VanEck Semiconductor ETF's 71% quarterly gain, the best in its 26-year history, underscores the magnitude of capital flowing into the sector.

This article is for informational purposes only and does not constitute investment advice.