AI chip stocks saw a mixed session on Friday, with notable gains from AMD following a bullish analyst call and renewed interest in memory maker SK Hynix's potential U.S. listing. The iShares Semiconductor ETF closed 1.5% higher at $596.25, as investors selectively backed certain names while stepping back from others perceived as overvalued.
AMD Surges on Citi Upgrade
Shares of AMD soared 4.7% to $511.57 after Citigroup upgraded the stock from Neutral to Buy and raised its price target to $575 from $460. The firm cited AMD's growing competitiveness in AI GPUs, particularly for training and inference workloads, and flagged potential GPU wins with Meta Platforms. Citi now projects AMD will generate $33 billion in AI chip revenue by 2027, climbing to $50.8 billion by 2028. This AI revenue trajectory is seen as a key driver for the stock's significant gains this year.
SK Hynix Nasdaq Plans Spotlight Memory
SK Hynix remained in focus amid reports that it plans to list on the Nasdaq, following a 230% surge in its share price this year. The company's market capitalization surpassed $1 trillion in May. SK Hynix is a major supplier of high-bandwidth memory (HBM), a critical component for AI servers that enables faster data transfer by sitting close to AI chips. This news reinforced the market's attention on Nvidia's supply chain, as HBM is integral to Nvidia's AI accelerators.
Nvidia Flat, Broadcom and Micron Slip
Nvidia edged up 0.2% to $205.19, while Taiwan Semiconductor Manufacturing added 0.6%. Broadcom slipped 0.9% despite reporting record fiscal Q2 revenue of $22.19 billion, up 48% year-over-year, with AI chip sales jumping 143% to $10.8 billion. CEO Hock Tan noted, "The momentum continues," but the stock declined as Wall Street had expected more. Reuters reported that Q2 revenue narrowly missed consensus, and Broadcom kept its 2027 AI revenue target unchanged. Micron dropped 1.4% ahead of its earnings report on June 24, with investors watching DRAM pricing and HBM demand.
Broader Market Context
Despite robust demand, AI chip stocks have faced headwinds. U.S.-listed chipmakers lost approximately $1.3 trillion in market value on June 5, and the PHLX Semiconductor Index fell 10.3%. Nvidia dropped about 6%, Micron 13%, and AMD nearly 11% during that selloff. Rising interest rates have pressured high-growth tech names, as higher yields reduce the present value of future earnings. However, Wells Fargo chief equity strategist Ohsung Kwon told Reuters, "I don't think it's the end of the (semiconductor) bull market."
Nvidia's Supply Chain Deals
Nvidia's supply chain remains central to the AI trade. This week, Nvidia announced new South Korean partnerships with SK Hynix, SK Telecom, Naver, Doosan, LG Group, and Hyundai Motor. SK Hynix secured a multiyear technology deal with Nvidia focused on advanced memory for AI data centers globally. CEO Jensen Huang called SK Hynix "Nvidia's largest memory partner," signaling that memory suppliers like SK Hynix and Micron are increasingly viewed as core AI infrastructure bets rather than cyclical chip names.
Valuation Concerns Persist
Valuation and execution risk remain key negatives. AMD trades at about 168 times trailing earnings, Broadcom at 98 times, and Nvidia at around 31 times. High price-to-earnings ratios leave little margin for error if forecasts slip. Micron appears cheaper on some forward metrics, but Goldman Sachs analyst James Schneider maintained a Neutral rating while lifting his price target to $900, citing a high bar ahead of its June 24 earnings. Investors are focused on DRAM pricing and HBM dynamics.
Upcoming Catalysts
AI chip stocks are increasingly driven by company-specific catalysts. AMD benefited from Citi's upgrade, while Nvidia continues to set the pace for AI semiconductors. Micron's fiscal third-quarter results on June 24 will be a key test for the HBM supply story. Additionally, Marvell Technology is set to join the S&P 500 before the open on June 22, a move that often triggers buying from passive funds tracking the index.
