--- title: "Chip Stock Frenzy Continues to Accelerate" type: "News" locale: "en" url: "https://longbridge.com/en/news/285837405.md" description: "The semiconductor sector's market capitalization has surged by approximately $3.8 trillion in the past six weeks. AI computing demand is spreading from GPUs to memory chips and traditional CPUs, driving a boom cycle across all chip categories. The leveraged ETF SOXL has accumulated gains of over 1200%, attracting a rush of retail investors. Unlike the Dotcom Bubble, this rally is supported by strong earnings, with Micron Tech trading at a P/E ratio of only 8.9x" datetime: "2026-05-10T10:11:48.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/285837405.md) - [en](https://longbridge.com/en/news/285837405.md) - [zh-HK](https://longbridge.com/zh-HK/news/285837405.md) --- # Chip Stock Frenzy Continues to Accelerate The semiconductor sector is experiencing a rare wealth feast. Over the past six weeks, the combined market capitalization of semiconductor constituents in the S&P 500 has increased by approximately $3.8 trillion. The intensity of the rally has led even seasoned investors to describe it as "somewhat surreal." (The basket of semiconductor indices has continued to strengthen since April) **The core logic driving this rally is the nearly insatiable demand for computing power from AI companies. This demand has spread from AI-specific chips to a broader range of semiconductor categories, including memory chips and traditional CPUs.** Major chip manufacturers have just reported impressive first-quarter earnings and provided more optimistic full-year outlooks. Intel has risen 239% year-to-date, SanDisk has surged 558%, and South Korea's main stock index has nearly doubled from its lows. Striking the right balance between joining the "last half-hour of the party" and guarding against the tide going out has become the market's most central proposition. ## AI Demand Spills Over, All Chip Categories Enter Boom Cycle The narrative logic of this chip stock rally underwent a key shift earlier this year. For years, investor enthusiasm was primarily focused on GPUs used for training and running generative AI models, while traditional CPUs were largely forgotten by the market. However, as Anthropic's latest AI model gained market recognition with its powerful autonomous agent capabilities, the demand structure for AI application scenarios changed accordingly. AI agents can run around the clock, continuously generating massive amounts of data, which has significantly boosted demand for memory chips. At the same time, demand for traditional CPUs is also recovering. Jonathan Cofsky, portfolio manager of the $8 billion Janus Henderson Global Technology and Innovation Fund, stated: > Right now, the world's wealthiest tech companies are frantically snapping up every chip and computing resource they can get their hands on. This has directly resulted in substantial profits for manufacturers. Shortages across various chip types are pushing up prices. Analysts expect this supply-demand imbalance to last for years rather than months, as multiple bottlenecks constrain the speed of capacity expansion. ## Earnings Support Valuation, Fundamental Differences from the Dotcom Bubble The most significant difference between this rally and the 2000 Dotcom Bubble lies in strong corporate earnings. Take memory chip manufacturer Micron Tech as an example. In 2023, the company's revenue was only $15.5 billion, and it recorded an operating loss, amid low memory prices at the time. According to analyst forecasts, revenue for the current fiscal year is expected to rise to $107 billion, with full-year operating profit potentially reaching $77 billion. Although the stock price has accumulated a gain of approximately 770% over the past year, **according to FactSet data, benefiting from significant earnings growth, Micron's current P/E ratio is only 8.9x based on expected earnings for the next 12 months, compared to the S&P 500's P/E ratio of 23x.** By traditional valuation standards, this skyrocketing chip stock actually appears "cheap." Denise Chisholm, Director of Quantitative Market Strategy at Fidelity Investments, stated: > The current anomaly lies precisely in how strong the earnings growth is. **In contrast, during the Dotcom Bubble, many of the biggest winners had little to no earnings or were completely unprofitable. This fundamental difference is the core basis for why most analysts remain positive on chip stocks.** ## Retail Investors Rush In, Leveraged ETF Surges Over Tenfold Beyond institutional investors, retail investors are also highly active in this chip feast. Data from Interactive Brokers shows that the 10 most actively traded stocks on the platform over the past week were almost exclusively chip manufacturers, tech companies purchasing chips, and one semiconductor-focused ETF—SOXL. **SOXL uses derivative instruments to track three times the daily performance of the NYSE Semiconductor Index.** Over the past year, this ETF has accumulated gains of approximately 1200%. As of the end of April, the combined daily trading volume of the 3x leveraged short semiconductor ETF SOXS and the 3x leveraged long semiconductor ETF SOXL surged to approximately 330 million shares, the highest level in at least 16 months. In comparison, the trading volume of the 3x leveraged long S&P 500 ETF SPXL and the 3x leveraged short S&P 500 ETF SPXS dropped to approximately 90 million shares, near this year's lowest levels. Steve Sosnick, Chief Strategist at Interactive Brokers, stated: > AI is driving the market, and indeed the entire economy, to a considerable extent. Semiconductors are the most direct manifestation of this logic currently... This is the closest I've seen to a vertical lift in my memory. Barclays analysts wrote in a report to sales and trading clients this week: > Remember, 'crazy' trends can often last longer than most people expect. ## Bubble Controversy Heats Up, Veterans Choose to Hold and Stay Vigilant However, the shadow of history continues to hover over this carnival. In the week ending May 7, the semiconductor ETF SMH recorded net outflows of $2.3 billion, marking the largest weekly outflow for the fund since its launch in 2011. Meanwhile, the PHILX Semiconductor Index has just completed its strongest six-week gain since the week of March 10, 2000—the historical node when the Dotcom Bubble peaked and subsequently collapsed. Some veteran investors who lived through that era are now choosing to continue holding their positions, but are also quietly calculating their exit timing. Seasoned investor Peter Feinberg has held Broadcom and TSMC for over ten years. These two investments have helped his portfolio consistently outperform the S&P 500 in recent years. He admits that the gains since 2026 have been "somewhat surreal." He summarized the shared sentiment of older investors in one sentence: > The most fun part of the party is often the half-hour before the police shut it down. Feinberg stated that he is considering whether and when to reduce some of his chip holdings, but for now, he chooses to hold, while constantly reminding himself that good times do not last forever. ### Related Stocks - [MU.US](https://longbridge.com/en/quote/MU.US.md) - [MUU.US](https://longbridge.com/en/quote/MUU.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [MULL.US](https://longbridge.com/en/quote/MULL.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [INTC.US](https://longbridge.com/en/quote/INTC.US.md) - [SNDK.US](https://longbridge.com/en/quote/SNDK.US.md) - [JHG.US](https://longbridge.com/en/quote/JHG.US.md) - [FDS.US](https://longbridge.com/en/quote/FDS.US.md) - [IBKR.US](https://longbridge.com/en/quote/IBKR.US.md) - [SOXS.US](https://longbridge.com/en/quote/SOXS.US.md) - [SPXL.US](https://longbridge.com/en/quote/SPXL.US.md) - [SPXS.US](https://longbridge.com/en/quote/SPXS.US.md) - [BCS.US](https://longbridge.com/en/quote/BCS.US.md) - [AVGO.US](https://longbridge.com/en/quote/AVGO.US.md) - [TSM.US](https://longbridge.com/en/quote/TSM.US.md) - [SNDKV.US](https://longbridge.com/en/quote/SNDKV.US.md) - [BARC.UK](https://longbridge.com/en/quote/BARC.UK.md) ## Related News & Research - [Micron is now worth more than JPMorgan as the stock sees its best week in two decades](https://longbridge.com/en/news/285756027.md) - [Micron: The only advanced storage island in the US mainland is evolving into an infrastructure stock.](https://longbridge.com/en/news/285335340.md) - [AMD vs. Intel: Inside the Chip War, This Analyst Picks a Side](https://longbridge.com/en/news/285786685.md) - [Evaluating Micron Technology Against Peers In Semiconductors & Semiconductor Equipment Industry](https://longbridge.com/en/news/285187026.md) - [Why Is Micron Technology Stock Surging On Friday?](https://longbridge.com/en/news/285722715.md)