- US semiconductor stocks rallied in pre-market trading, led by SanDisk, Micron, and Intel
- SanDisk shares rose 5.89%, Micron gained 2.89%, Intel advanced 1.93% in early trading
- AI-linked tech stocks rebounded after strong earnings eased concerns of an overheated trade
US semiconductor stocks extended their rally in on Friday, with SanDisk, Micron Technology and Intel among the notable gainers as investors continued to pile into artificial intelligence-linked technology stocks following a strong recovery in the sector.
SanDisk shares rose as much as 8.81% but pared gains to trade 6.16% higher at $1,622.65 as of 12:22 p.m. EDT, while Micron Technology gained 1.39% to $962.76 after it had risen 3.36%. Intel shares advanced 2.1% but gave up initial gains to trade 1.19% lower at $103.31. The gains come after a strong session for semiconductor stocks on Thursday, when renewed optimism around artificial intelligence and robust technology earnings lifted the Nasdaq 100 by 1.15%.
AI Trade Regains Momentum
Technology stocks have staged a sharp recovery after last month's sell-off, which was triggered by concerns that the AI trade had moved too far, too quickly.
However, strong earnings from several megacap technology companies have helped ease those concerns and encouraged investors to return to AI-related stocks. The Nasdaq 100 climbed more than 1% on Thursday to its highest level since late June.
The S&P 500 also closed at a fresh record on Thursday, supported by the broader technology rally.
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Pre-market trading on Friday remained relatively subdued for the broader market. S&P 500 futures were little changed, while Nasdaq 100 futures were also little changed. Futures on the Dow Jones Industrial Average fell 0.2%.
Semiconductor Rally Broadens
The latest gains build on Thursday's strong performance across the semiconductor space. SanDisk shares jumped 4.42% to $1,404, while Advanced Micro Devices (AMD) gained 2.43% to $494.98. Micron Technology advanced 3.67% to $945.19 and SK Hynix surged 5.43% to $163.04.
The gains reflect continued investor confidence that the AI investment cycle can remain strong, particularly as technology companies and AI hyperscalers continue to report robust earnings. The Nasdaq has now recovered sharply after falling more than 10% just two weeks ago, with strong earnings helping revive enthusiasm for AI-linked stocks.
Capacity Constraints In Focus
While strong earnings have been a major catalyst for AI infrastructure stocks, investors are increasingly turning their attention to supply and capacity constraints.
"As seen in other AI-related earnings results, scarcity translates into pricing power," said Bloomberg Macro Strategist Michael Ball.
This dynamic could remain important for semiconductor companies as demand for AI infrastructure continues to grow. Limited capacity, alongside strong demand, could potentially support pricing power for companies supplying critical components to the AI ecosystem.
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