Chip Stocks Surge as AI Demand Fuels Explosive Gains in First Half of 2026

Chipmaker shares have surged during the first half of 2026, as investors piled into hardware firms that underpin the AI boom, according to analysis.

Investor demand has driven up the value of semiconductor and memory‑chip manufacturers, whose profits have soared in 2026, while some large software firms have fallen out of favour this year.

The share price of several chip companies has tripled or more since the start of January, lifting Asian‑Pacific stock markets sharply higher.

South Korea’s Kospi index rose 125% in 2026, its best first half since at least 1990, according to Guardian analysis of London Stock Exchange Group data. The rally was led by electronics giants Samsung, whose shares climbed 183% this year, and SK Hynix, up 310% since early January.

Both companies reported a sharp rise in demand as AI firms compete for chips to power their data centres.

U.S. chipmakers have also been in high demand. SanDisk shares are up 780% in 2026 and have surged 4,510% over the past 12 months. Western Digital gained 240% this year, Micron rose 296% and Seagate advanced 226%, with just two trading days remaining before the second half.

The four U.S. firms had delivered “the kind of six‑month gains you might normally expect over decades”, said Dan Coatsworth, head of markets at AJ Bell.

He added that “demand outpacing constrained supply sparked a surge in memory‑chip prices, sending suppliers’ shares on a spectacular upward trajectory. Higher selling prices combined with stronger demand create a potent recipe for explosive earnings growth.”

Apple attributed a recent increase in iPad and MacBook prices to higher memory‑chip costs, saying the rise occurred last week. The company is also reportedly seeking U.S. government approval to purchase memory chips from CXMT, a Chinese firm on the Pentagon’s blacklist.

Shares in hyperscaler firms that are launching AI services have fallen in recent weeks as investors shifted capital from software to hardware stocks. Microsoft, for example, is down 24% in 2026 and reached a one‑year low last week.

Some investors have expressed concern over the massive spending plans announced by leading AI companies, warning that the resulting higher borrowing will erode cash flow and make those firms more capital‑intensive.

Signs of a slowdown have emerged in recent days, with chip‑stock prices pulling back from recent peaks as investors rotate out of technology into other sectors.

“Having piled into AI and tech since late March, there is a desire to protect profits, and investors remain in a mood to sell first and ask questions later,” said Chris Beauchamp, chief market analyst at IG.

Overall, stock markets posted solid gains in the first half of 2026, with Japan’s Nikkei climbing 38%.

The UK’s FTSE 100 rose 5.8%, receding from a record high at the end of February as the Iran conflict impacted valuations. The London market received a boost from takeover speculation on several companies, including Beazley, DCC, Glencore, Schroders, Segro and Intertek.

Brent crude opened the year at $60 per barrel and is ending June roughly $12 higher. However, by late April the price had doubled to over $120 as the closure of the Strait of Hormuz triggered supply constraints.

The U.S. S&P 500 index has advanced 7.4% this year, ending last week at 7,354 points.

Mark Haefele, chief investment officer at UBS Global Wealth Management, forecasts further upside for the U.S. market, projecting the S&P 500 to reach 8,200 points by June 2027.

“Our base case scenario envisions continued strength in AI capital expenditure, a resilient U.S. economy, ongoing fiscal spending globally, and robust credit creation that together will support corporate earnings growth and broader markets,” he said.

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