Chipmaker Shares Surge in Early 2026
Shares in chipmakers have surged in the first half of this year as investors piled into companies that manufacture the hardware supporting the AI boom, according to analysis.
Investors have driven up the value of semiconductor and memory chip manufacturers, whose profits have soared during 2026, at the expense of some large software companies, which have fallen out of favour this year.
The share price of some chip companies has tripled, or more, since the start of January, driving stock markets sharply higher.
Strong Performance in Asia Pacific Markets
South Korea’s Kospi index is up 125% this year, marking its strongest first half since at least 1990, analysis of data from the London Stock Exchange Group showed. This growth was driven by the electronics group Samsung, whose share price has jumped 183% so far this year, and SK Hynix, which has risen 310% since the start of January.
Both companies have reported a significant increase in demand this year, as AI companies have competed for chips to power their datacentres.
US Chipmakers Experience Exceptional Gains
US chipmakers have also been in great demand. Shares in Sandisk are up 780% in 2026 and have rocketed by 4,510% over the last 12 months. The digital storage company Western Digital has gained 240% this year, while Micron is up 296% and Seagate has risen 226%, with two trading days left until the second half of the year begins.
The four US companies had produced the “kind of gains in six months you might normally expect over decades with investing”, said Dan Coatsworth, the head of markets at the investment platform AJ Bell.
“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.”
Impact on Tech Companies and Market Shifts
Apple recently attributed a rise in the cost of memory chips as a factor affecting its business last week. The company is also seeking approval from the Trump administration to purchase memory chips from CXMT, a Chinese company that the Pentagon has blacklisted.
Shares in hyperscalers, which are deploying AI services, have declined in recent weeks as investors shifted their holdings from software to hardware stocks. This includes Microsoft, which is down 24% during 2026 and hit a one-year low last week.
Some investors have expressed concern over the substantial spending plans announced by leading AI companies. This has led to higher borrowing and will consume the firms’ cash flow, making them more capital-intensive businesses.
Signs of a Market Rotation
There have been indications in recent days that the chip stock boom is weakening, with shares retreating from their recent highs as investors rotate out of tech into other sectors.
“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,” said Chris Beauchamp, the chief market analyst at the trading and investment platform IG.
Broader Market Performance in 2026
Overall, stock markets have posted solid gains over the first half of 2026, with Japan’s Nikkei climbing 38%.
The UK’s FTSE 100 has gained 5.8%, having retreated from a record high at the end of February as the Iran war affected share prices. The London stock market was supported by takeover offers for several companies, including Beazley, DCC, Glencore, Schroders, Segro, and Intertek, which received approaches from suitors.
Brent crude oil started the year at $60 a barrel and is ending June about $12 higher. However, at the end of April, its price had doubled to over $120 due to the closure of the fuel supply route, which caused shortages.
The US S&P 500 share index has gained 7.4% so far this year, reaching 7,354 points at the end of last week.
Market Outlook
Mark Haefele, the chief investment officer at UBS Global Wealth Management, forecasts that the US market will rise 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.
