Asian chip stocks surge as Nvidia hits record high, riding AI Wave

Asian chip stocks rallied on Tuesday following Nvidia's record-high close overnight , fueled by the booming demand for artificial intelligence (AI) technologies. Investors are bullish about the prospects of chip manufacturers benefiting from Nvidia’s success, as key suppliers and semiconductor companies across Asia saw their stock prices surge, News.Az reports.

South Korea's SK Hynix, a key supplier of high-bandwidth memory (HBM) chips for Nvidia’s AI applications, led the way with a 2.8% rise. Meanwhile, shares of Samsung Electronics, which is also expected to manufacture HBM chips for Nvidia, gained 0.5%.

Taiwan Semiconductor Manufacturing Company (TSMC) and Hon Hai Precision Industry (Foxconn), both part of Nvidia's supply chain, jumped 2.4% and 3.5%, respectively, as confidence in the semiconductor market strengthened.

Japanese firms also saw significant gains. Semiconductor maker Tokyo Electron surged by 5%, chip-testing equipment supplier Advantest rose 3.8%, and Renesas Electronics climbed over 4%. Meanwhile, SoftBank Group, which holds a stake in chip designer Arm, soared as much as 6.4%.

On Wall Street, Nvidia’s shares surged 2.4% to close at $138.07, breaking the previous June 18 high of $135.58. This rally pushed Nvidia’s market value to $3.4 trillion, surpassing Microsoft to become the second most valuable U.S. company, trailing only Apple.

The surge comes as Wall Street anticipates strong earnings from major tech companies by the end of October. Nvidia’s GPUs, essential for AI workloads, are in high demand, with giants like Microsoft, Meta, Google, and Amazon purchasing them in large volumes to power advanced AI clusters.

Despite experiencing a dip in August after releasing better-than-expected earnings but missing gross margin expectations, Nvidia’s stock has soared nearly 180% year-to-date, reaffirming its dominance in the AI revolution.

With the earnings season approaching, analysts predict that demand for Nvidia's GPUs will continue to grow, further fueling investor optimism.

News.Az