By Hannah Pedone
There's been a dramatic 'return to AI data-center optimism,' one analyst notes
Shares of AMD were up 11% on Friday.
The chip sector outperformed the S&amp;P 500 on Friday to a degree not seen in over a year, as artificial-intelligence mania kicked into a new gear.
Shares of Advanced Micro Devices (AMD), Qualcomm (QCOM), Intel (INTC) and Micron Technology (MU) all rose between 8% and 15% in Friday's session.
The PHLX Semiconductor Index SOX gained 5.5% on Friday and beat the S&amp;P 500 SPX by 4.66 percentage points - the strongest level of outperformance since a 9.22-point spread seen on April 9 of last year, according to Dow Jones Market Data.
D.A. Davidson analyst Gil Luria told MarketWatch that Intel, AMD and Micron shares were seeing particular &#34;torque&#34; as investors piled further into chip stocks.
AMD's stock seems to be benefiting as Wall Street considers the potential for turbulence in OpenAI's deal with Broadcom (AVGO), through which the ChatGPT creator is due to buy custom chips.
According to The Information, OpenAI is attempting to get Broadcom to finance the first $18 billion phase of production for a custom chip. However, Broadcom reportedly will only do so if Microsoft (MSFT) commits to buying 40% of the chips.
Fallout from that arrangement could help foster a stronger relationship between AMD and OpenAI, Luria said.
Read more: As Nvidia earnings draw closer, here are 5 things investors need to watch
Meanwhile, shares of Intel rose after the Wall Street Journal reported that the company and Apple (AAPL) have reached a preliminary agreement to collaborate on creating chips for Apple devices.
OpenAI, Broadcom, Intel and Apple did not immediately return requests for comment.
Luria said that investors are also showing fresh appreciation for Micron, whose stock is the least expensive within the large-cap chip universe. Micron's forward price-to-earnings ratio is the lowest of all PHLX Semiconductor Index components, sitting at 8.92 on Friday.
Benchmark analyst Cody Acree told MarketWatch that shares of Qualcomm, along with those of AMD and Intel, were still enjoying a postearnings glow, after their respective reports reaffirmed growing demand for central processing units used in data centers.
Qualcomm also announced last month a partnership with an unnamed hyperscaler to provide custom silicon, with initial shipments expected later this calendar year.
Acree said the chip sector was up on a &#34;return to AI data-center optimism after a day of sharp profit-taking.&#34; On Thursday, the iShares Semiconductor ETF SOXX, a proxy for chip stocks, closed down 2.9% - before rebounding 5.7% Friday.
See also: Why is AMD's stock up so much? 'The world has changed.'
-Hannah Pedone
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
05-08-26 1707ET

The global semiconductor sector experienced a strong surge, with the chip index jumping over 4%, outperforming the broader market and hitting a new all-time high! AMD, the computing power giant, saw its data center business grow by 57% in the first quarter and its second-quarter guidance significantly exceeded expectations, leading to a post-market surge of over 10%. Intel's stock price rose nearly 13% in a single day, boosted by rumors of Apple's contract manufacturing talks. Micron Technology and SanDisk, two major memory manufacturers, both hit new all-time highs overnight, driven by strong AI demand and expectations of locked-in long-term contracts. The "supercycle" in the semiconductor industry chain has not only not peaked, but is accelerating in a deeper and broader dimension.

The global semiconductor sector experienced a strong surge, with the chip index jumping over 4%, outperforming the broader market and hitting a new all-time high! AMD, the computing power giant, saw its data center business grow by 57% in the first quarter and its second-quarter guidance significantly exceeded expectations, leading to a post-market surge of over 10%. Intel's stock price rose nearly 13% in a single day, boosted by rumors of Apple's contract manufacturing talks. Micron Technology and SanDisk, two major memory manufacturers, both hit new all-time highs overnight, driven by strong AI demand and expectations of locked-in long-term contracts. The "supercycle" in the semiconductor industry chain has not only not peaked, but is accelerating in a deeper and broader dimension.

Storage and chip sectors rose across the board, and the super cycle continues!

SOXX

SOXL

Shares of AMD, Micron, and other chip companies surged on Friday, with AMD up 11%, as the chip sector outperformed the S&P 500 significantly. The PHLX Semiconductor Index gained 5.5%, marking the strongest outperformance in over a year. Analysts noted a renewed optimism in AI data centers, with potential impacts from OpenAI's dealings with Broadcom. Intel's shares rose following a preliminary agreement with Apple for chip collaboration. Micron's stock is seen as the most affordable in the large-cap chip sector, attracting investor interest.

- The chip sector experienced significant gains on Friday, with AMD shares rising 11% and other major companies seeing increases between 8% and 15%.  
- Analysts attribute this growth to renewed optimism surrounding AI data centers, particularly following developments involving OpenAI and Broadcom’s chip financing deal.  
- The PHLX Semiconductor Index outperformed the S&P 500 by 4.66 percentage points, marking the strongest performance in over a year, as investors showed renewed interest in firms like Micron and Qualcomm.

AMD, Micron shares surge on a big day for chip-sector outperformance