Chip stocks rocket as AI hardware demand surges
Shares in chipmakers have surged in the first half of 2026 as investors piled into companies making hardware for artificial intelligence, according to analysis. Semiconductor and memory chip manufacturers have seen profits soar, while some large software companies have fallen out of favour.
The share price of some chip companies has tripled or more since January, driving Asia Pacific stock markets sharply higher. South Korea’s Kospi index rose 123% in the first half, its strongest performance since at least 1990, according to Guardian analysis of London Stock Exchange Group data.
Samsung and SK Hynix lead South Korean rally
The Kospi surge was driven by Samsung, whose share price jumped 169% in 2026, and SK Hynix, which rose 303% since the start of January. Both have reported a big increase in demand as AI companies compete for chips to power their datacentres.
On Monday, South Korean President Lee Jae Myung pledged to cement the country’s leadership in the industry with investments worth more than $576 billion over several years, covering semiconductors, AI datacentres and robotics. Under the plan, Samsung and SK Hynix will build four fabrication plants in the country’s south-west region.
US chipmakers see extraordinary gains
US chipmakers have also been in great demand. Shares in Sandisk are up 780% in 2026 and have rocketed 4,510% over the last 12 months. Western Digital gained 240% this year, Micron is up 296%, and Seagate has risen 226%, with two trading days left until the second half of the year begins.
Dan Coatsworth, head of markets at investment platform AJ Bell, said the four US companies had produced the “kind of gains in six months you might normally expect over decades with investing”. He added: “Demand exceeding constrained supply led to a surge in memory chip prices and took suppliers’ shares on a spectacular ride upwards. Higher selling prices and greater demand is a powerful cocktail for explosive earnings growth.”
Apple blames chip costs for price hikes
Apple blamed the rise in memory chip costs for increasing iPad and MacBook prices last week. The company is reportedly asking the Trump administration for clearance to buy memory chips from CXMT, a Chinese company blacklisted by the Pentagon.
Shares in hyperscalers rolling out AI services have fallen in recent weeks as investors shifted from software to hardware stocks. Microsoft is down 24% in 2026 and hit a one-year low last week. Some investors have balked at huge spending plans by leading AI companies, which have led to higher borrowing and will eat up cashflow.
Chip stock boom shows signs of faltering
There have been signs in recent days that the chip stock boom is faltering, with shares falling from recent highs as investors rotate out of tech into other sectors. Chris Beauchamp, chief market analyst at IG, said: “Having piled in to AI and tech since the end of March, there is a desire to protect profits, and investors continue to be in a mood to sell first and ask questions later.”
Generally, stock markets have posted solid gains in the first half of 2026. Japan’s Nikkei climbed 38%. The UK’s FTSE 100 gained 5.8%, having fallen from a record high at the end of February as the Iran war hit share prices. The London market was lifted by takeover offers for Beazley, DCC, Glencore, Schroders, Segro and Intertek.
Brent crude oil began the year at $60 a barrel and ended June about $12 higher, but at the end of April its price had doubled to more than $120 as the closure of the Strait of Hormuz fuelled supply shortages. The US S&P 500 index gained 7.4% so far this year, to 7,354 points at the end of last week.
Mark Haefele, chief investment officer at UBS Global Wealth Management, predicts the US market will climb over the next year, lifting the S&P 500 to 8,200 points by June 2027. “Our base case sees continued strength in AI capital expenditure, a resilient US economy, ongoing fiscal spending around the world, and strong credit creation continuing to support corporate earnings growth and markets more broadly,” he said.
