Nasdaq Rallies 1.7% as AI Chip Demand Outpaces Supply
US equities climbed sharply, with the Nasdaq gaining 1.69% as falling Treasury yields boosted sentiment. AI hardware and memory stocks led the advance, driven by supply constraints and a projected surge in capital expenditures for 2027.
US stocks closed higher on Tuesday, propelled by a broad rally in technology and semiconductor sectors. The Nasdaq Composite Index rose 1.69% to 26,418.30 points, while the S&P 500 gained 1.14% to 7,637.76 points. The Dow Jones Industrial Average added 0.61% to reach 51,778.04 points. According to GN stocks/nasdaq, the market’s positive trajectory was supported by declining US Treasury yields and lower oil prices, which alleviated pressure on growth-oriented equities.
Semiconductor and memory companies outperformed their peers, with the Philadelphia Semiconductor Index climbing 3.14% to 11,599.49 points. Among the index’s 30 constituents, 29 stocks posted gains. This sector-wide strength reflects a market consensus that artificial intelligence infrastructure spending is accelerating, creating immediate revenue opportunities for chip manufacturers and memory providers alike.
Memory Suppliers Face Supply Shortages
Micron Technology (MU) shares advanced 5.5% to $977.50, riding a wave of optimism regarding future demand. Citi’s latest analysis suggests that the transition of AI from training to continuous learning will trigger simultaneous explosive growth in demand for High Bandwidth Memory (HBM), server DDR5, and enterprise solid-state drives starting in 2027. The firm forecasts global memory capital expenditures will jump 46.5% year-over-year to $80.4 billion in 2027. However, Citi notes that supply-side constraints, including HBM capacity allocation and slow technology migration, mean that even significant investment will struggle to close the supply-demand gap in the near term.
Other memory and storage firms followed suit. SanDisk (SNDK) rose 6.21%, SK Hynix (SKHY) gained 4.64%, Seagate Technology (STX) added 2.55%, and Western Digital (WDC) climbed 1.65%. This collective rise underscores the market’s belief that memory bandwidth is becoming a critical bottleneck for AI workloads, insulating suppliers from typical cyclical downturns.
Intel Cites CPU Capacity Limits
Intel (INTC) shares surged 7.67% to $108.80 after CEO Lip-Bu Tan addressed the current market dynamics. Tan stated that CPU demand has far exceeded the company’s current supply capabilities, with Intel currently meeting only about 50% of demand from frontier AI customers. He disclosed that CEOs from several major technology companies have directly requested additional CPU shipments, acknowledging that the company’s capacity cannot keep up with the rapid deployment of AI agents. This admission of capacity constraints has been interpreted by the market as a signal of robust underlying demand for general-purpose computing in AI architectures.
Nvidia Projects Doubling Of Chip Sales
Nvidia (NVDA) shares rose 2.54% to close the session, following comments by CEO Jensen Huang at an AI executive summit in Scotland. Huang stated that the company expects chip sales in 2027 to double those of 2026. While specific baseline figures and calculation methodologies have not been publicly disclosed, the projection aligns with his earlier prediction at the GTC conference that cumulative revenue from AI chips, including the Blackwell and Vera Rubin platforms, could reach at least $1 trillion by 2027. Nvidia’s next-generation Vera Rubin platform is currently entering full production, supporting the anticipated revenue growth.
Broader tech giants also contributed to the index gains. TSMC (TSM) rose 3.00%, AMD (AMD) advanced 6.36%, and Broadcom (AVGO) climbed 2.29%. Arm Holdings (ARM) saw the largest gain among major chip designers, rising 8.57%. In a separate development, Marvell, Microsoft, and Utimaco announced the launch of a cloud-native payment security platform on Azure, signaling continued innovation in enterprise security infrastructure alongside hardware expansion.
