Shares of Lam Research surged 20%, putting the company on track for its strongest trading session since 1999 after it reported robust earnings and offered an optimistic outlook driven by rising demand linked to artificial intelligence infrastructure.
Microsoft shares also jumped 15%, marking their best performance since 2008, after the company highlighted strong momentum in its Azure cloud business and announced higher capital spending plans to support growing demand for AI-related services.
The positive results helped reverse some of the pressure that had recently hit semiconductor stocks, which had suffered a sharp selloff amid concerns that massive investments in artificial intelligence technology could be approaching a peak.
The recent downturn erased more than $1 trillion in market value across the broader market earlier in the week, as investors questioned whether the pace of AI-related spending could continue at current levels.
Memory chip companies also benefited from renewed optimism after Samsung warned that the global memory shortage could continue until 2028. Micron shares climbed 13%, while Sandisk surged 21%, recovering from losses triggered by disappointing results from South Korean chipmaker SK Hynix.
Chipmakers have been among the biggest winners of the AI investment wave, as technology companies continue spending heavily on advanced memory systems, processors and data-centre infrastructure needed to power artificial intelligence applications.
Meanwhile, Arm Holdings gained 6% following strong demand signals for its first internally developed chip, the AGI CPU, as the company seeks to expand beyond chip design and compete directly in the physical semiconductor market.
Arm Chief Executive Officer Rene Haas said demand for the new product had exceeded expectations, with more than $2 billion in demand projected across fiscal years 2027 and 2028.
“The demand for the product is great, and more importantly, I think it underpins the fact that the market for CPUs, for agentic workloads and around inference is just key, and we’re just seeing that grow,” Haas told CNBC on Thursday.
The broader semiconductor market also advanced, with the iShares Semiconductor ETF climbing 8%.
Several major chip companies recorded significant gains, including Applied Materials and Advanced Micro Devices, which each rose about 13%. Intel gained 12%, while Marvell Technology increased 10%. Nvidia, one of the biggest beneficiaries of the AI boom, added 2%.
The rally reflected renewed investor confidence that demand for artificial intelligence hardware remains strong, despite recent concerns over valuations and the sustainability of technology companies’ aggressive AI investments.