Intel surges 13% in a single day, AI trading returns to "hard" logic

Original Title: Chip Makers Push Nasdaq, S&P 500 to New Highs
Original Author: Jared Mitovich, The Wall Street Journal
Translation: Peggy, BlockBeats

Editor’s Note: AI trading is shifting from “model narratives” to “hardware bottlenecks.”

Over the past year, market discussions about AI have focused more on large model companies, cloud providers’ capital expenditures, and whether AI applications can truly generate revenue. But the recent rise in U.S. stocks shows investors are re-pricing the more fundamental and scarce links in the AI infrastructure chain: storage, semiconductor manufacturing, and high-performance chip supply.

The surge in storage chip sector essentially reflects that the AI industry expansion has entered a more realistic phase. Training data, model parameters, inference loads, and data center expansion all require higher-performance, larger-capacity storage and computing hardware support. For end tech giants like Apple, rising storage costs mean increased expenses; but for chip manufacturers like Micron, SanDisk, Intel, and Samsung, this marks the start of a new profit cycle.

It’s worth noting that the market is not entirely optimistic. Wells Fargo’s sentiment indicator triggered a “sell” signal for the first time since 2021, indicating some overheating in the current market. AI remains the main theme, but investors’ concerns are shifting: it’s no longer about who tells the grander AI story, but who truly controls supply bottlenecks and can turn capital expenditure into revenue and profit.

Meanwhile, Middle East tensions, oil price fluctuations, and Federal Reserve rate expectations continue to disturb the market. In other words, the new highs in U.S. stocks are not solely driven by AI enthusiasm but are the result of a combination of AI infrastructure boom, easing geopolitical risks, and liquidity expectations.

The AI bull market is becoming more “physical.” When computing power, storage, energy, and supply chains become real constraints, the market will reward not just story-telling companies but those capable of providing key infrastructure manufacturing.

Below is the original text:

John G Mabanglo / EPA / Shutterstock

On Tuesday, investors flooded into the storage chip sector, pushing the Nasdaq Composite and S&P 500 to new highs, further cementing the best rally for the PHLX Semiconductor Index since the dot-com bubble.

Since late March, the semiconductor index has risen 54%, marking its best performance in a 25-trading-day span since March 2000. As AI drives a surge in demand for specialized chips, chip manufacturers are ramping up production to meet market needs.

Rising storage prices are increasing costs for tech giants like Apple, but for the entire chip manufacturing industry, it’s a big boon. Tuesday’s gains caused Intel’s stock to jump 13%, with market cap rising to about $544 billion, surpassing Oracle and Johnson & Johnson. Shares of SanDisk, Micron, and Qualcomm all rose over 10%, lifting the tech-heavy Nasdaq Composite by 1%.

Wells Fargo’s chief equity strategist Ohsung Kwon said companies designing, manufacturing, or selling high-performance AI compute chips are the biggest beneficiaries of current large-scale AI infrastructure buildout. “That’s really the bottleneck,” he said.

Kwon noted that AI trading has entered a healthier cycle: investors’ focus is shifting from capital spending to whether this technology can be monetized. This change in focus is also reflected in last week’s earnings reports from tech giants like Amazon and Google—traders are more concerned whether their large AI investments are actually translating into revenue.

Despite the ongoing AI boom, Wells Fargo’s sentiment indicator triggered a “sell” signal for the first time since November 2021. Kwon described recent market gains as a “sugar rush” euphoria, indicating that investors should start adding protective measures to their portfolios.

Reports suggest Apple is considering having Intel and Samsung produce main chips for its devices in the U.S., and investor optimism has driven Intel’s stock higher. Samsung’s stock also rose about 5% in the Korean market.

Among major U.S. stock indices, Nasdaq led the gains, with the S&P 500 up 0.8%, and the Dow Jones Industrial Average up 0.7%, or 356 points. All 11 sectors of the S&P 500 rose that day, with materials and technology leading; the small-cap Russell 2000 index rose 1.8%, hitting a new all-time high. The financial services sector opened lower after Coinbase and PayPal announced layoffs but recovered later, ending roughly flat.

On Tuesday, investor hopes increased that the U.S. and Iran would avoid a full-scale conflict after Monday’s Gulf tensions.

Near-month Brent crude futures fell 4% to $109.87 per barrel. On Monday, after Iran attacked a key oil terminal in the UAE and ships in the Strait of Hormuz, the most active oil contracts closed near four-year highs. However, U.S. Defense Secretary Pete Hegseth downplayed the impact of these attacks on Tuesday, affirming that the ceasefire agreement with Tehran, ongoing for four weeks, remains in effect.

Bill Northey, senior investment director at U.S. Bank Asset Management Group, said, “It seems that there has been no substantial escalation, and the market has taken a breather.”

He added that although hostilities in the Middle East appeared to ease on Tuesday, the conflict continues to influence future U.S. economic data and Federal Reserve rate decisions. For example, if the Strait of Hormuz can be fully reopened safely, it would weaken market expectations of higher inflation and push down the 10-year U.S. Treasury yields.

Northey stated, “Our baseline view is that this volatility is likely to persist.”

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