Asian chip stocks track Nvidia rally on AI hopes

Investing.comSep 12, 2024 5:46 AM

Investing.com-- Asian chipmaking stocks rose on Thursday, tracking an overnight rally in Nvidia after CEO Jensen Huang offered encouraging comments on artificial intelligence-driven demand.

Nvidia suppliers including TSMC (TW:2330) (NYSE:TSM), SK Hynix Inc (KS:000660), Hon Hai Precision Industry (Foxconn) (TW:2317) and Advantest Corp. (TYO:6857) up between 4% and 8%.

Broader chipmaking stocks also advanced, with Japan’s Tokyo Electron Ltd. (TYO:8035) and Renesas Electronics Corp (TYO:6723) up 3.3% and 1.5%, respectively. SoftBank Group Corp. (TYO:9984), which is exposed to chipmaking through its Arm subsidiary, added 7.4%.

Memory chip giant Samsung Electronics (LON:0593xq) Co Ltd (KS:005930) rose 1.4% after Reuters reported the firm was considering a slew of global job cuts of up to 30% in some of its divisions.

Semiconductor Manufacturing International Corp (HK:0981)- China’s biggest chipmaker- rose 0.4%, while internet giants Alibaba Group (NYSE:BABA) (HK:9988), Baidu Inc (HK:9888) (NASDAQ:BIDU) and Tencent Holdings Ltd (HK:0700) rose between 1% and 3%.

Gains in tech came tracking an 8.1% rally in NVIDIA Corporation (NASDAQ:NVDA) on Wednesday- the chipmaker’s best day in over six weeks.

Nvidia CEO Huang said the company was seeing strong demand for its top-end AI chips, including the upcoming Blackwell line, and was also facing a potential supply shortage due to heightened demand for its chips.

His comments helped Nvidia rebound from a bruising loss clocked last week, after Nvidia executives were seen selling some shares. Nvidia’s current-quarter revenue and margin guidance- released in late-August- had also missed some elevated expectations.

But the stock was still trading up about 150% so far in 2024, having seen a stellar rally on hype over AI-fueled demand. Huang said that companies could not escape the need for higher processing power, flagging increased chip demand from higher computing and data center requirements.

Huang’s comments helped spur bets that AI demand will help the tech industry duck a broader decline in economic conditions.

Reviewed byTony

Disclaimer: The content of this article solely represents the author's personal opinions and does not reflect the official stance of Tradingkey. It should not be considered as investment advice. The article is intended for reference purposes only, and readers should not base any investment decisions solely on its content. Tradingkey bears no responsibility for any trading outcomes resulting from reliance on this article. Furthermore, Tradingkey cannot guarantee the accuracy of the article's content. Before making any investment decisions, it is advisable to consult an independent financial advisor to fully understand the associated risks.