(Oct 2): Global chipmakers saw their market value soar as investors rushed to get exposure to artificial intelligence, the latest sign of a frenetic bull run that is pushing tech stocks to all-time highs.
The sector is being swept up by a we of good news from AI companies, including ChatGPT-owner OpenAI’s record US$500 billion (RM2.1 trillion) valuation on an employee share sale and its deal with a group of South Korean chipmakers, as well as a report that Intel Corp is in talks to add Advanced Micro Devices Inc as a customer.
The bullishness has pushed the combined market capitalisation of the Philadelphia Stock Exchange Semiconductor Index and a gauge tracking Asia chip stocks up by just over US$200 billion in the latest session, according to Bloomberg calculations.
Korean chip stocks were among the biggest gainers on Thursday, surging on the OpenAI deal and sending the Kospi Index to a record high. Shares of SK Hynix Inc jumped 10%, while Samsung Electronics Co advanced 3.5%.
Analysts say the bull run is being driven by a ‘fear of missing out’, with investors largely dismissing concerns about a bubble developing in the AI sector.
“Tech momentum shows no sign of fading — as if grity doesn’t exist — with headwinds brushed aside and every AI headline sparking bursts of euphoria,” said Hebe Chen, an analyst at Vantage Markets in Melbourne. “Bubble talk lingers, but it’s FOMO that’s clearly running the show. Momentum looks self-sustaining until upcoming fourth quarter earnings may force the reality check.”
The recent rally has caused a spike in chipmakers’ valuations: Bloomberg’s Asia chip gauge is trading at around 19 times forward earnings estimates while the SOX Index is now trading at 27 times earnings, approaching record highs from 2024.
Read also: OpenAI hits US$500b valuation after share sale to SoftBank, others — Reuters
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