SK Hynix, Samsung Stocks Surge on AI Rally Resurgence

South Korea’s semiconductor titans, SK Hynix and Samsung Electronics, experienced a dramatic surge in Seoul on Friday, mirroring a robust rally in U.S. technology stocks. This surge was fueled by landmark earnings reports from Amazon and Microsoft, which rekindled investor confidence in the accelerating pace of artificial intelligence (AI) related infrastructure spending.

SK Hynix, a dominant player in high-bandwidth memory (HBM) chips crucial for AI accelerators, saw its stock price climb by over 25%, on track for its best trading day on record. Samsung Electronics, another key semiconductor manufacturer with broad product offerings including advanced memory and foundry services, posted gains exceeding 20%. Supporting this momentum, companies like LG Innotek and Seoul Semiconductor also recorded significant upticks, rising 11.2% and 7.8% respectively.

The optimism extended to Japanese chip manufacturers, which also witnessed a strong rebound. Advantest, a leading provider of semiconductor test equipment essential for chip validation, climbed nearly 18%. Tokyo Electron, a major supplier of wafer fabrication equipment, gained almost 9%. Disco, specializing in dicing and precision cutting technologies vital for semiconductor manufacturing, rallied over 13%. Lasertec, known for its cutting-edge mask inspection systems for advanced semiconductor lithography, advanced by more than 12%, and Renesas Electronics, a significant player in microcontrollers and automotive chips, added over 10%. SoftBank Group, whose substantial stake in Arm Holdings positions it as a significant proxy for AI innovation through chip design, also jumped more than 9%, underscoring the broad-based enthusiasm for AI-related technologies.

This pronounced rally in Asian semiconductor stocks represents a sharp turnaround from earlier in the week, which was characterized by a notable sell-off. Prior to this resurgence, semiconductor equities had faced pressure amid concerns over the lofty valuations of AI-driven companies and burgeoning competition from Chinese memory chip manufacturers, which had introduced an element of market uncertainty.

The iShares Semiconductor ETF (SOXX), a benchmark for the sector, surged more than 8% overnight in U.S. trading, indicating a significant reallocation of capital by investors back into AI-linked chipmakers. This movement was directly precipitated by the stronger-than-expected cloud computing results from the two U.S. tech giants.

Amazon’s stock jumped more than 9% in extended trading after its second-quarter revenue surpassed analyst expectations, a performance largely driven by the sustained strength and continued growth of its Amazon Web Services (AWS) cloud-computing business. Concurrently, Microsoft had already experienced a substantial 16% rally during Thursday’s regular session. This was triggered by its reporting of Azure cloud growth exceeding market forecasts, thereby reinforcing the market’s conviction that global demand for AI infrastructure remains exceptionally robust and is set to continue its upward trajectory.

The performance of these tech giants highlights a critical shift in investor sentiment. For months, concerns had been mounting regarding the substantial capital expenditures required to build out AI infrastructure, and whether these investments would yield commensurate returns. The recent earnings reports from Amazon and Microsoft provide compelling evidence that these investments are not only ongoing but are also driving significant revenue growth and profitability. This suggests a more mature and sustainable phase for AI expansion, moving beyond mere hype to tangible business impact.

Andrew Jackson, head of equity strategy at Ortus Advisors, commented on the market’s reaction. He noted that Microsoft’s stronger-than-expected quarterly results “sparked a huge rebound for risk-on and AI,” effectively reversing the recent downturn in technology stocks. In his analysis, Jackson highlighted that investors were particularly reassured by the robust Azure cloud revenue growth coupled with management’s disciplined approach to capital expenditure. He emphasized that the market has shown a clear preference for companies demonstrating strategic efficiency, penalizing those exhibiting a “spend at all costs” mentality without clear pathways to profitability.