Since the release of ChatGPT at the end of 2022 and the subsequent boom in generative AI, NVIDIA (NVDA) has been the biggest winner in the wave of AI infrastructure investment. However, as the AI industry chain continues to expand, Wall Street capital is beginning to flow toward other hardware companies that have not previously been the focus of market attention.
This week, the “broadening momentum” of the AI industry chain has further intensified. Shares of Advanced Micro Devices (AMD) and Intel (INTC) have both risen by about 25%. Memory chip giant Micron Technology (MU) surged more than 37%, while optical fiber materials manufacturer Corning (GLW) gained approximately 18%. All four companies have seen their stock prices double so far this year, with Intel rising more than 200%. In contrast, NVIDIA has gained about 15% this year, only slightly outperforming the Nasdaq index.
Analysts at Mizuho suggest that this may indicate “a new power transition taking place in the AI space.” The market is increasingly convinced that AI infrastructure construction is not a short-term trend, and data centers will continue to require a broader range of advanced hardware components for years to come.
Memory chips have become one of the hottest themes recently. A global shortage of memory chips has driven sustained price increases, making 47-year-old Micron Technology one of the market’s most active trades. The company’s market capitalization surpassed $800 billion for the first time this week, and its stock price has risen more than 750% over the past year. Micron’s CEO previously stated that due to supply constraints, core customers are currently receiving only “50% to two-thirds” of the memory chips they need.
Meanwhile, the AI boom has also reignited market interest in CPUs. In recent years, as tech giants massively purchased GPUs, CPUs were somewhat sidelined by the market. However, as the direction of AI development gradually shifts from chatbots to AI agents, demand for CPUs is rapidly recovering. Bank of America expects the data center CPU market to grow from $27 billion in 2025 to over $60 billion by 2030.
Nevertheless, some analysts have begun to caution against overheating risks in the AI sector. An analyst at BTIG noted that the current rally in the semiconductor sector is highly similar to the dot-com bubble period of 1999. The Philadelphia Semiconductor Index has risen 66% this year and could face a correction of 25% to 30% in the future. Michael Burry, the “Big Short” investor famous for accurately predicting the U.S. housing market crisis, warned that the current market frenzy over AI is increasingly resembling the final stages before the dot-com bubble burst. He said that during long drives, he could hardly hear financial programs discuss anything other than AI, and the market’s reactions to economic data have gradually lost logical coherence.
Prominent hedge fund manager Paul Tudor Jones recently compared the current AI rally to the dot-com bubble era, though he believes the bull market may still have further room to run, predicting the current trend could continue for another one to two years. However, he also warned that if valuations continue to inflate rapidly, the eventual market correction could be quite dramatic
