- Micron, Coreweave, Intel, SK Hynix, and SanDisk futures rose over 6% in pre-market trade
- Nasdaq Futures increased 1.05% amid chip stock rebound after oil prices and yields dropped
- Stocks fell last week due to concerns on chip oversupply and rising borrowing costs for AI firms
Stock futures of Micron Technology, Corewaeve, Intel, SK Hynix and SanDisk rose up to more than 6%, in pre-market trade, as chip stocks saw a rebound supported by a drop in oil prices and Treasury yields. Nasdaq Futures were up 1.05% in pre-market trade.
The stocks had faced concerns regrding profitability from investors which led to a a wide selloff in the previous week, amid increasing investor concerns of oversupply of chips, anticipated to take place in 2029, along with scrutiny around escalating borrowing costs of AI companies.
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Shares of Coreweave saw a 6.89% uptick to trade at $65.62 in pre-market, while SK Hynix's futures went up 4.56% to $142.71, SanDisk's shares during pre-market trade saw a 4.27% rise to $1,354.76, Intel saw a 4.17% increase to $93.60 before the opening bell.
Micron's stock futures rose 3.67% to $911.10 while Advanced Micro Devices' share price went up 3.63% before the markets opened. Nvidia's shares increased 1.95% pre-market to $218.30.
Investors were also concerned about competition from Chinese chipmakers, adding to uncertainty over the outlook for companies that have benefited from the AI boom. Semiconductor stocks are particularly sensitive to shifts in demand, pricing pressures and expectations for spending on computing infrastructure.
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.
(This is a developing story.)
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