Chipmaking stocks shot up at the start of 2026 because demand for artificial intelligence kept going up after three years of gains in 2025. ASML shares went up 9%, Micron Technology shares went up 8%, and Lam Research and Intel shares each went up about 7%. Marvell Technology went up 5%, while Advanced Micro Devices (AMD) and Nvidia went up about 3% and 2%, respectively.
The Rise in Demand for AI
The sector is moving forward because cloud giants like Amazon and Google are putting a lot of money into AI data centers. Even though there are worries about a bubble, like investor Michael Burry betting against Nvidia, analysts are still positive about AI infrastructure spending, which is expected to reach $1.2 trillion by 2030. Bank of America names Nvidia, Broadcom, and other companies as top picks that are trading at good prices. They expect semiconductor sales to grow by 30% in 2026.
Key Players to Watch: Nvidia (NVDA): AI leader with a 37% annual earnings growth forecast; they are the market leader in accelerators.
- ASML: A company that makes equipment that is very important for making advanced chips and led the early 2026 rally.
- Micron Technology: Demand for high-bandwidth memory raises outlook; Morgan Stanley’s top pick.
- Broadcom (AVGO): Strong free cash flow; the stock could reach $500/share.
- AMD: 77% increase in 2025, and partnerships with OpenAI bring in $22.9 billion in revenue for data centers in 2026.
