- Wall Street futures rose Monday with Nasdaq 100 up 1.05% before market open
- Chip stocks Micron, AMD, Intel gained between 2.3% and 3.04% in pre-market trade
- AI chip stocks rebound seen as a positioning reset after last week’s sell-off
Wall Street futures edged higher on Monday aided by recovering chip stocks, with the tech-heavy Nasdaq 100 index jumping 1.05% in the run up to market open.
Shares of key chipmakers like Micron Technology Inc. rose 2.3% to $997.90, Advanced Micro Technology Inc. was up over 3% at $534, Intel Corp climbed 3.04% to $124.
The recovery comes after a rather tumultous week for the AI-linked giants. On Thursday, shares of MU, AMD, Sandisk, and others were under pressure as investors booked profits after a record-breaking rally.
"The pre-market recovery in AI-linked chip stocks looks less like a clean reversal and more like a positioning reset after a sharp unwind," said Harshal Dasani, Business Head at INVAsset PMS.
The decline followed reports that Meta Platforms may rent out excess AI computing capacity, fuelling concerns that the rapid build-out of AI infrastructure could eventually create oversupply. The development had prompted investors to reassess rich valuations across semiconductor stocks. Meta's stock extended gains and rose over 1.4% to $590.85 on July 6.
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Futures tied to S&P 500 rose 0.5% to 7,559.75, Nasdaq was up 1.05% to 29,859.25, and Dow Jones Industrial Average remained largely unchanged near its fresh high of 52,900 during pre-market trade.
Other tech companies like Oracle Corp. and Marvell Technology Inc. also gained 3% and 3.48% and rose to $145 and $253.79, respectively. The recovery is significant for Marvell as it ended nearly 10% lower in the previous trading session.
However, Dasani pointed out a broader trend in memory and storage manufacturers, highlighting that AI has moved from a simple earnings-upgrade story to a crowded cycle trade.
"The demand pool remains real because hyperscalers are still spending on compute, memory, networking, power, and data-centre infrastructure. But the equity market had started pricing that demand with very little margin for error," he outlined.
Therefore, investors become wary of even a small shift in rates, capex commentary, export controls, or supply assumptions in such a setup, prompting them to make "outsized moves", according to the Dasani.
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