AI chip stocks drove a powerful rally on Thursday, with the Nasdaq composite retaking a key technical level as shares of Arm, Micron, and Sandisk surged. The sector-wide advance added roughly $250 billion to market capitalization, according to Kiplinger, as investors piled into semiconductor names betting on sustained artificial intelligence spending.
Catalysts included news that SK Hynix is preparing for its US stock market debut, a potential record-breaking IPO that underscores the AI boom's momentum. Micron's gains were particularly notable, with the memory chipmaker benefiting from rising capital expenditure forecasts tied to AI infrastructure buildout. The rally overcame lingering geopolitical concerns following fresh US-Iran strikes in the Middle East.
Market reaction extended beyond individual names: the broader technology sector lifted major indexes, with the Nasdaq and S&P 500 both closing higher. Arm Holdings and Sandisk were among the top gainers, reflecting broad demand for AI-focused hardware and optical-communication stocks. The positive sentiment also spilled into cryptocurrencies, where Bitcoin held firm amid renewed risk appetite.
Analysts remain cautious, however, noting that the rally's sustainability depends on continued AI spending from hyperscalers and the absence of further escalations in the Middle East. Some strategists warn that the Federal Reserve's next move—whether rate cuts or hikes—could shift investor focus away from AI euphoria toward macroeconomic headwinds.