Shares in chipmakers underpinning AI boom rocket in first half of 2026

Shares in chipmakers have surged in the first half of this year as investors piled into companies that make the hardware underpinning the AI boom, according to analysis.Investors have driven up the value of semiconductor and memory chip manufacturers, whose profits have soared during 2026, at the expense of some large software companies, which have fallen out of favour this year.The share price of some chip companies has tripled, or more, since the start of January, driving Asia Pacific stock markets sharply higher.South Korea’s Kospi index is up 125% this year, its strongest first half since at least 1990, Guardian analysis of data from the London Stock Exchange Group showed. This was driven by the electronics group Samsung, whose share price has jumped 183% so far this year, and SK Hynix, which has risen 310% since the start of January.Both have reported a big increase in demand this year, as AI companies have competed for chips to power their datacentres.US chipmakers have also been in great demand. Shares in Sandisk are up 780% in 2026, and have rocketed by 4,510% over the last 12 months. The digital storage company Western Digital has gained 240% this year, while Micron is up 296% and Seagate has risen 226%, with two trading days left until the second half of the year begins.The four US companies had produced the “kind of gains in six months you might normally expect over decades with investing”, said Dan Coatsworth, the head of markets at the investment platform AJ Bell.He added: “Demand exceeding constrained supply led to a surge in memory chip prices and took suppliers’ shares on a spectacular ride upwards. Higher selling prices and greater demand is a powerful cocktail for explosive earnings growth.”Apple blamed the rise in the cost of memory chips for an increase in its iPad and MacBook prices last week. The company is also reportedly asking the Trump administration for clearance to buy memory chips from CXMT, a Chinese company that the Pentagon has blacklisted.Shares in the hyperscalers, which are rolling out AI services, have fallen in recent weeks as investors shifted their holdings out of software and into hardware stocks. That includes Microsoft, which is down 24% during 2026 and hit a one-year low last week.Some investors have balked at the huge spending plans announced by leading AI companies. This has led to higher borrowing and will eat up the firms’ cashflow, making them more capital-intensive businesses.There have been signs in recent days that the chip stock boom is faltering, with shares from their recent highs as investors rotated out of tech into other sectors.“Having piled in to AI and tech since the end of March, there is a desire to protect profits, and investors continue to be in a mood to sell first and ask questions later,” said Chris Beauchamp, the chief market analyst at the trading and investment platform IG.skip past newsletter promotionafter newsletter promotionGenerally, there have been solid stock market gains over the first half of 2026, with Japan’s Nikkei climbing 38%.The UK’s FTSE 100 has gained 5.8%, having fallen back from a record high at the end of February as the Iran war hit share prices. The London stock market was lifted by takeover offers for several companies, with Beazley, DCC, Glencore, Schroders, Segro and Intertek receiving approaches from suitors.Brent crude oil began the year at $60 a barrel and is ending June about $12 higher. However, at the end of April its price had doubled, to more than $120, as the closure of the strait of Hormuz fuelled supply shortages.The US S&P 500 share index has gained 7.4% so far this year, to 7,354 points at the end of last week.Mark Haefele, the chief investment officer at UBS Global Wealth Management, predicts the US market will climb over the next year, lifting the S&P 500 to 8,200 points by June 2027.“Our base case sees continued strength in AI capital expenditure, a resilient US economy, ongoing fiscal spending around the world, and strong credit creation continuing to support corporate earnings growth and markets more broadly,” he said.