The surge in chip stocks this year is putting the dot-com rally to shame

By Britney Nguyen

All of the stocks in the PHLX Semiconductor Index are up more than 10% in 2026, while the S&P 500 has gained 9.9% this year

Intel is the best performer in the PHLX Semiconductor Index so far this year.

The artificial-intelligence boom has sparked a massive rally for chip stocks so far this year, netting a record for the widely followed PHLX Semiconductor Index.

The sector has been led higher by shares of old-school chipmaker Intel (INTC), which has been a major beneficiary of resurging interest in server central processing units amid the rise of agentic AI, which depends on the chips to execute tasks autonomously.

The shift to inference, or running AI models after training, has also driven strong demand for CPUs.

The benchmark PHLX chip-sector tracker SOX, known as the SOX, has soared 79.3% so far in 2026, marking its best-ever performance for the first 100 trading days of the year, according to Dow Jones Market Data. The previous record for the SOX, which was launched in December 1993, was a 62% rally during the first 100 trading days of 1995, just as the dot-com boom was getting started, the data shows.

All 30 chip stocks in the index are up more than 10% so far this year, while in comparison, the S&P 500 Index SPX has gained 9.9% year to date. The biggest SOX gainer this year is Intel's stock, which has rocketed 230%, while the worst performer has been Nvidia (NVDA), whose shares have advanced 14%.

Advanced Micro Devices (AMD) has also been a winner of the server-CPU revival. After seeing its shares rise 131.4% this year, AMD crossed the $800 billion market-capitalization threshold for the first time on Tuesday, according to Dow Jones Market Data.

On Wednesday, despite its shares falling 1.7%, AMD's market cap stood at $808.03 billion, enough to unseat JPMorgan Chase (JPM) as the 13th-largest U.S. company by market cap. JPMorgan shares fell 2.4% on Wednesday to knock the banking leader's market cap down to $801.92 billion.

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Shares of Nvidia, on the other hand, have lagged those of its semiconductor peers in 2026, as some investors remain worried about the sustainability of AI spending. So far this year, the top four hyperscalers are expecting to put in close to $700 billion altogether to build out AI infrastructure.

Nvidia's rise to the top of the value chain, with a market cap of $5.14 trillion, has been powered by its graphics processing units, but the company is now looking to dominate the $200 billion total addressable market that it sees for CPUs - one that it has "never addressed before," Nvidia Chief Financial Officer Colette Kress said on the company's earnings call earlier this month.

The AI hype has also led to a severe shortage of memory chips that has in turn boosted Micron Technology's stock (MU) to be the second-best performer this year, with a 225.3% gain. The memory-chip maker crossed into the $1 trillion market-cap club for the first time on Tuesday after its stock climbed to an all-time closing high of $895.88, also positioning it as the 10th-largest U.S. company by market cap.

Barclays analyst Tom O'Malley updated his price target for Micron's stock from $675 to $1,175, representing upside of about 27% from Wednesday's closing price of $928.41. The new price target is based on O'Malley raising the multiple for his earnings per share estimate for 2027 that reflects "a structurally better pricing environment with more contractual agreements."

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Micron announced during its earnings report in March that it was moving to strategic customer agreements, or SCAs, that it said go beyond the long-term agreements it had been making with customers.

The SCAs "have specific commitments over a multiyear time horizon for improved visibility and stability in our business model," Micron CEO Sanjay Mehrotra said on the call. He also said Micron had inked its first five-year agreement.

O'Malley noted that Micron hadn't shared much about the structure of its new agreements, but that he expects it will as it signs more.

"When these details come to light, we see it as a positive catalyst and another step forward in the sustainability of this memory cycle," O'Malley said.

-Britney Nguyen

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05-27-26 1653ET