- 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
Shares 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.
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 2.93% uptick to $63.19 after trading over 6%, while SK Hynix's stock went up 4.95% to $143.24, SanDisk's shares saw a 6.77% rise to $1,387.25, Intel saw a 5.42% increase to $94.72 before the opening bell.
Micron's shares rose 3.73% to $911.59 while Advanced Micro Devices' share price went up 4.41% to $552.08 after the markets opened. Nvidia's shares increased 0.62% pre-market to $215.46.
US stock markets opened higher on Monday, as technology shares recovered following a sell-off in artificial intelligence-linked stocks.
The Dow Jones Industrial Average dipped 38.37 points, or 0.07%, to 51,964.04 at 9:31 a.m. The S&P 500 gained 45.85 points, or 0.54%, to 7,703.58, while the Nasdaq Composite advanced 288.989 points, or 1.05%, to 26,424.21, according to real-time market quotes.
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.
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