Beyond Nvidia: Micron, Intel, and AMD Lead a $2 Trillion Chip Rally Fueled by AI Demand

Summary: The second quarter witnessed a historic surge in semiconductor stocks, with companies like Micron, Intel, and AMD experiencing explosive growth as investors broadened their focus beyond Nvidia in the artificial intelligence boom. This rally added a staggering $2 trillion to their combined market capitalization, signaling a significant shift in the AI investment landscape.

Chipmakers not named Nvidia experienced a phenomenal second quarter, driven by investors expanding their artificial intelligence portfolios. Memory giant Micron surged over 240%, Intel saw its stock climb 216%, and Advanced Micro Devices (AMD) posted an impressive 186% gain. Collectively, these three tech titans added approximately $2 trillion to their market caps, establishing themselves as major players in the U.S. tech landscape, now ranking as the 10th, 11th, and 12th most valuable tech companies.

While Nvidia continues to dominate as the largest AI chipmaker by market capitalization and revenue growth, its stock saw a more modest 15% rise in the same period. The performance of its key hyperscaler clients—Amazon, Alphabet, Meta, and Microsoft—was mixed. Meta's stock dipped by nearly 2%, while Alphabet's shares led the group with a 24% increase.

Anshul Gupta, an analyst at Barclays, noted this shift, stating, "The rotation out of AI hyperscalers into AI enablers has shifted investors' euphoria into semis, driving spectacular rallies." This sentiment underscores a broader trend of seeking value in companies that facilitate AI development and deployment.

Micron, a pivotal player in computer memory, more than quadrupled its revenue in the latest quarter, largely due to soaring memory prices demanded by AI chipmakers. The company's gross margin expanded dramatically to 84.9% from 39% a year prior. Intel, a legacy CPU manufacturer, is capitalizing on renewed demand for its processors, especially as AI capabilities are increasingly integrated into devices, and is concurrently expanding its U.S. chip manufacturing capabilities.

AMD, a rival to Intel in the CPU market and a competitor in graphics processing units (GPUs), saw its stock nearly triple, adding $615 billion in market value. Analysts have described these market movements as a potential "changing of the guard in AI," as investment flows into semiconductor manufacturers that complement Nvidia's offerings, anticipating substantial growth from AI data center capital expenditures.

The AI infrastructure supply chain beyond memory and processors also experienced significant gains. Marvell, a provider of networking gear, saw its shares climb approximately 200%. Arm, which licenses its chip designs, rose 134%. The VanEck Semiconductor ETF (SMH) recorded its best quarterly performance since its inception, increasing by 71%.

Watch: Why Chinese memory chips may not be a near-term threat to Micron