Chip stocks continued their rally in pre-market trade after staging a recovery in the previous session with shares of Super Micro trading at nearly 13%, while Intel and Nvidia jump 3% before the opening bell on Wednesday.
AI-linked stocks staged a recovery on Tuesday after opening lower, as a pullback in crude oil prices helped improve market sentiment and investors assessed the latest concerns surrounding the sustainability of the artificial intelligence trade.
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Shares of Super Micro were at a 12.17% uptick to $36.42 before the market opened, while SK Hynix's went up 3.39% to $144.53 pre-market, SanDisk's stock futures saw a 3.19% rise to $1,409, Intel saw a 1.44% increase to $92.98 before the opening bell.
Micron's stock futures rose 2.99% to $922.91 while Advanced Micro Devices' share price went up 1.89% to $544.87 prior to the markets opening. Nvidia's shares increased 1.82% pre-market to $220.55.
Last week's weakness came as investors reassessed whether the enormous sums being invested in AI infrastructure will generate sufficient returns. Concerns about the financial sustainability of the data-centre boom have intensified following heavy selling in CoreWeave, a cloud-computing provider with significant debt.
Other factors affecting the decline in semiconductor share price included investor caution with regards to the cyclical peak in memory pricing. Prominent names in the investing space such as Ray Dalio predicted that the AI industry is nearing a "classic bubble" which is close to bursting. This is due to climbing interest rates and the need for liquidity.
Dalio noted that a large amount of debt was being taken out to fund AI endeavours at the Forbes Global CEO Conference in Singapore on Wednesday.
The latest concerns followed the public market debut of South Korean AI firm Elice, whose shares tumbled more than 30% overnight. The decline added to weakness across Asian technology markets, with South Korea's Kospi closing in bear market territory.
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Technology stocks also weighed on European equity markets during the morning session.
Investors have increasingly focused on the debt used to finance AI infrastructure, alongside uncertainty over how quickly demand for computing capacity and related services will translate into sustainable earnings.
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