Semiconductor stocks surged Thursday, extending a powerful recovery from a punishing selloff that rattled the sector earlier in the week.
Intel (INTC) led the charge with an 8.6% gain after CEO Lip-Bu Tan made striking comments at a tech conference about the company’s manufacturing constraints.
Tan told the conference that Intel can satisfy only about 50% of CPU demand because of limited manufacturing capacity and a memory chip shortage, a candid admission that nonetheless energized investors.
The CEO also signaled an accelerated ramp-up of new manufacturing nodes, giving markets confidence that Intel is moving aggressively to close its capacity gap.
At least two analysts issued bullish notes on Intel following Tan’s remarks, adding further momentum to the stock’s intraday rally.
The comments rippled immediately through the broader memory sector, lifting stocks that are closely tied to chip supply and demand dynamics.
Micron Technology (MU) climbed 5.8% on the day, while SK Hynix (SKHY) rose 3.9%, with both companies benefiting from renewed optimism around tightening chip supply.
Nvidia (NVDA) gained 2.5% and stood out as the single largest contributor to gains in both the S&P 500 and the Nasdaq Composite.
Advanced Micro Devices (AMD) posted an impressive 6.2% jump, rounding out a broad-based rally across the semiconductor space.
The rebound in chip stocks came as U.S. equity markets recovered more broadly from Wednesday’s sharp post-Fed selloff, with the Nasdaq rising 1.4%, the S&P 500 gaining 0.9%, and the Dow adding 0.4%.
The 10-year Treasury yield fell back below 5%, offering some relief to growth-oriented sectors that had been pressured by elevated borrowing costs.
Oil prices also eased on reports of additional Saudi supply flowing to Asia, reducing one source of inflationary pressure that had been weighing on investor sentiment.
The broader recovery came despite a notably hawkish Federal Reserve outlook, with the dot plot showing 16 of 18 officials expecting another rate hike before year-end and 10 seeing no cuts through 2029.
Investor fears around an artificial intelligence spending slowdown and the broader impact of sustained rate hikes appear to be subsiding, at least for now.
