By late April, U.S. semiconductor stocks surged to record levels after Intel delivered a stronger-than-expected revenue outlook, reinforcing confidence that the AI boom — the key driver of this year’s gains, is far from slowing down.
The Philadelphia Semiconductor Index climbed 3.2% to an all-time high and is on track for an 18-day winning streak. Year-to-date, the index has advanced more than 47%.
Semiconductors remain one of the biggest beneficiaries of aggressive investments by tech giants in AI infrastructure. According to Angelo Kourkafas of Edward Jones, the AI build-out race is still gaining momentum, with demand showing no signs of easing.
LSEG data indicates that the semiconductor sector is expected to post first-quarter earnings growth of 109.2%, significantly outpacing the broader S&P 500 information technology sector, which is projected at 48.2%.
Intel shares jumped 22.6%, surpassing their dot-com peak from 2000, driven by a strong revenue outlook that highlights robust demand for CPUs, a critical component in powering AI workloads.
Meanwhile, AMD and Arm rose 13.7% and 12%, respectively, while Nvidia, currently the world’s most valuable company gained 1.6%. Last year’s rally in chip stocks was largely led by Nvidia, fueled by demand for its GPUs used in AI model training.
Following a recent correction, tech valuations have become more aligned with the broader market, creating room for capital to flow back into the sector.
Earlier this year, tech stocks faced pressure as investors questioned whether heavy AI spending would translate into near-term financial returns. The S&P 500 tech sector’s forward P/E has since declined to around 22x, down from a peak of 31.8x last year.
Notably, the market appears less reactive to potential disruptions such as low-cost AI models from China’s DeepSeek. Analysts suggest that investors are now taking a more measured, long-term view rather than reacting emotionally.
The Philadelphia Semiconductor Index is currently trading at a forward P/E of about 26.6x, compared to roughly 20.7x for the S&P 500.
In addition, Texas Instruments has projected second-quarter revenue and profit above expectations, briefly pushing its shares to a record high before a slight pullback.
