NVIDIA has broken through the $150 mark for the first time since last November, with semiconductor stocks in Asia, Europe, and the USA experiencing widespread gains. AI demand stimulated Foxconn's revenue to reach a record high in the fourth quarter of last year, becoming the main reason driving chip stocks to lead. Meanwhile, Microsoft and OpenAI have released positive signals regarding AI demand, and the market also anticipates a significant speech by Jensen Huang on Monday, all of which have boosted market sentiment.
On Monday, January 6, chip stocks drove a significant rise in the US stock market. In the first two hours of trading, the Nasdaq rose nearly 2%, the S&P 500 Index increased by 1.3%, and the PHLX Semiconductor Index surged nearly 4%, reaching the highest level in five and a half months since July 23 of last year.
Among key individual stocks, the "AI darling" NVIDIA rose over 5%, with its stock price breaking $150 for the first time since November 2024, approaching the intraday record high of $152.89 set on November 21, and is expected to reach a historical closing high, with all three trading days in the new year showing gains.
Semiconductor stocks in Asia, Europe, and the USA showed broad gains. South Korea's SK Hynix and Samsung increased nearly 10% and nearly 3% respectively, while Taiwan Semiconductor, the world's largest chip foundry manufacturer producing chips for NVIDIA, reached a new high in Asian stock prices, with its US stocks up over 5.4%, also hitting a record high.
ASML Holding, a key global semiconductor equipment manufacturer, saw its European stocks rise over 8% and US stocks increase by over 9%. Another Dutch chip company, ASM International, rose by 6.5%, while Germany's Infineon and European chip foundry STMicroelectronics both soared over 8%.
In the US stock market, NVIDIA's main competitor AMD rose nearly 4%, Memory Chip manufacturer Micron Technology and AI Server supplier Super Micro Computer increased by over 10%, while chip manufacturing equipment stocks Applied Materials, KLA Corp, and Lam Research all rose about 5%. However, Broadcom's nearly 4% gain significantly narrowed, and Intel turned from a 2% rise in the early trading to a decline at midday.
One of the reasons for the strong performance of chip stocks: Key companies' Earnings Reports indicate that the high demand for AI is expected to continue into the new year.
Analysts generally point out that Foxconn is expected to achieve a record high revenue for the fourth quarter of 2024, with AI demand stimulating double-digit growth in its sales revenue, becoming the main driver of Monday's chip stock leading performance.
Because Foxconn's performance indicates that there are almost no signs of a slowdown in demand for AI, the demand for AI Servers remains strong, suggesting that the AI boom will continue into the new year.
Previously, there were concerns that large capital expenditures on AI by companies could be unsustainable. Last year, enthusiasm for AI drove US stock markets to new highs, and investors were eager to see if this theme could continue to lead the market.
As the world's largest electronic products contract manufacturer, Foxconn stated in a weekend announcement that its revenue for October to December 2024 will grow 15% year-on-year to a record high for the same period, despite a month-on-month decline in November and December revenue, but still showing growth compared to the same period last year, with December's total operating revenue increasing by over 42% year-on-year, marking the second-highest record for that month in history.
Its announcement emphasized that the market demand for AI Servers and new computing products is 'strong', and the company's automotive-related Business is also growing. Its computing product division has shown 'strong growth', while the smart Consumer Electronics division has slightly decreased in revenue year-on-year due to production issues.
The company also provided confidence in AI demand for its guidance in the first quarter of this year, expecting 'significant growth compared to a year ago'. Analysts pointed out that Foxconn's strong sales performance at the end of last year was mainly due to growth in Cloud Computing and network products, including AI Servers designed by chip manufacturers like NVIDIA. Foxconn will release its complete fourth-quarter Earnings Report on March 14.
The second reason for the chip stocks leading the market: Microsoft and OpenAI released bullish signals for AI demand, anticipating Jensen Huang's speech at CES.
Additionally, news last Friday and this Monday also showed strong signs of AI demand, contributing to the rise of chip stocks.
Last Friday, Microsoft announced plans to invest 80 billion dollars in the 2025 fiscal year to build datacenters capable of handling AI workloads, with over half of the spending taking place in the USA. OpenAI CEO Altman stated on Monday that the AI computing power used by customers in the ChatGPT Pro product is so significant that the company's 200-dollar monthly subscription plan results in losses.
The market is also eagerly anticipating NVIDIA CEO Jensen Huang's heavyweight keynote speech on Monday evening at the world's most influential technology event—the Consumer Electronics Show (CES) 2025.
Mizuho Securities analyst Jordan Klein stated that the market expects Jensen Huang to provide clues about the release of the next-generation GPU Rubin and other new products, which could further support the semiconductor industry.
There are also analyses indicating that Foxconn's performance provides optimistic signals for NVIDIA's strongest chip, Blackwell's capacity expansion, and therefore, Micron Technology and South Korea's SK Hynix, which provide high bandwidth memory chips for NVIDIA, have seen larger increases.
According to research firm TrendForce, the market size for AI servers is expected to grow from 205 billion dollars in 2024 to 298 billion dollars in 2025, with AI servers accounting for over 70% of the total value of the entire server industry this year.
