Omar Marques | Lightrocket | Getty Images
Shares of South Korea’s semiconductor giants SK Hynix and Samsung Electronics surged in Seoul on Friday, lifted by a powerful rebound in U.S. tech stocks after upbeat results from Amazon and Microsoft strengthened investor confidence in artificial intelligence demand.
SK Hynix was recently up more than 25%, a move that would mark its strongest trading day on record if the rally holds through the close. Samsung climbed over 20%, while LG Innotek gained 11.2% and Seoul Semiconductor added 7.8%.
The buying spread across Japan’s semiconductor sector as well. Advantest jumped nearly 18%, Tokyo Electron rose almost 9%, Disco advanced more than 13%, Lasertec gained over 12% and Renesas Electronics climbed more than 10%. SoftBank Group, often viewed as an artificial intelligence-linked stock because it owns Arm, also rallied more than 9%.
The sharp gains marked a dramatic turnaround for Asian chip stocks after a difficult stretch earlier in the week, when the sector came under pressure from worries about stretched AI valuations and rising competition from Chinese memory chip producers.
In the U.S., the iShares Semiconductor ETF (SOXX) soared more than 8% overnight as traders moved back into AI-related chip names, encouraged by stronger-than-forecast cloud performance from Amazon and Microsoft.
Amazon rose more than 9% in after-hours trading after posting second-quarter revenue that topped Wall Street estimates, supported by continued momentum in its cloud-computing division. Microsoft had already climbed 16% during Thursday’s regular session after reporting Azure cloud growth that exceeded expectations, adding to the view that AI infrastructure investment remains strong.
Andrew Jackson, head of equity strategy at Ortus Advisors, said Microsoft’s better-than-expected quarterly numbers “sparked a huge rebound for risk-on and AI,” giving technology shares a lift after their recent slide.
He wrote in a note on Friday that investors were reassured after Azure cloud revenue beat expectations while management kept capital spending “in check,” noting that a “‘spend at all costs’ mentality has been punished by the market.”
