AI Surge Propels U.S. Chip Stocks to Record Heights

U.S. chip stocks witnessed remarkable growth on Friday, driven by Intel's optimistic revenue forecast and the ongoing AI boom. The Philadelphia SE Semiconductor Index hit a record high, continuing its impressive streak. The semiconductor sub-industry is expected to outpace the broader IT sector, reflecting robust demand and brightening prospects.

The U.S. chip industry reached unprecedented heights on Friday, with Intel's unforeseen robust revenue forecast igniting renewed optimism in the sector's rally, driven by the AI boom. The Philadelphia SE Semiconductor Index climbed 2.5%, marking an all-time high and extending its record-breaking run to 18 consecutive gains, having surged over 42% this year.

Spearheaded by tech giants ramping up their AI infrastructure, chip stocks have reaped significant benefits. "The AI build-out race is still on," stated Angelo Kourkafas, a senior global investment strategist at Edward Jones. In alignment, the semiconductor sub-industry projects an impressive first-quarter earnings growth of 104.9%, surpassing the broader S&P 500 IT sector, as per LSEG I/B/E/S data.

Intel's shares spiked by 22.3%, surpassing its historical dotcom-era peak, with AMD and Arm also making substantial gains. Nvidia, which led last year's surge with its GPUs, inched up 1.2%. Analysts also noted the market's subdued concern over China's DeepSeek, indicating the industry's resilience. Meanwhile, Texas Instruments forecast revenue and profit above estimates, propelling its shares to a record high before retracting slightly on Friday.