Record chip rally adds $2 trillion in combined value to Micron, Intel and AMD in second quarter

In a remarkable turn of events, semiconductor companies unrelated to Nvidia experienced significant growth in the second quarter, fueled by an increasing investor interest in artificial intelligence. Micron and Intel saw their market values more than triple, with Advanced Micro Devices (AMD) closely following suit. Collectively, these three tech giants added approximately $2 trillion to their market capitalizations, now ranking as the 10th, 11th, and 12th most valuable technology firms in the United States. Despite Nvidia maintaining its status as the largest company by market cap and achieving substantial revenue increases, its stock only rose by 15% during the same period. The performance of its hyperscaler clients—Amazon, Alphabet, Meta, and Microsoft—was mixed, with Meta experiencing a nearly 2% decline, while Alphabet stood out with a 24% increase. Barclays analyst Anshul Gupta noted, "The rotation out of AI hyperscalers into AI enablers has shifted investors' euphoria into semiconductors, driving spectacular rallies." Micron, a key player in computer memory production, saw its stock soar over 240%, resulting in an additional market cap of around $920 billion. The company's recent report highlighted a staggering increase in revenue, which more than quadrupled, thanks to soaring memory prices driven by AI chipmakers. Micron's gross margin jumped to 84.9% in the third quarter, a significant rise from 39% a year prior. Intel, known for its central processing units (CPUs), also enjoyed a substantial increase of 216% in value, contributing an extra $480 billion to its market cap. The company is currently investing in new chip factories across the United States while benefiting from a resurgence in CPU demand as AI technology becomes more prevalent in devices. AMD, Intel's competitor in the CPU sector, added $615 billion in market value, nearly tripling its stock price. While AMD also produces graphics processing units, it remains behind Nvidia in that particular market. Analysts have suggested that these market fluctuations could indicate a "changing of the guard in AI," as investors shift their focus toward companies that manufacture semiconductors that complement Nvidia's offerings. This trend is expected to drive a significant expansion in capital expenditures for AI data centers, benefiting a broader range of companies. In addition to memory and processors, other areas within the AI infrastructure supply chain saw impressive growth. Marvell, a networking equipment manufacturer, experienced about a 200% increase, while Arm, which provides technology and designs to other chipmakers, rose by 134% during the quarter. The VanEck Semiconductor ETF (SMH) recorded a notable 71% increase, marking its best quarterly performance since its inception in 2000.