SK Hynix surges 25%, Samsung jumps 20% as AI spending fears evaporate overnight
Blowout cloud results from Amazon and Microsoft sent Asian chip stocks soaring on Friday, wiping out a week of losses driven by fears that AI investment was running ahead of reality.
Key points
- SK Hynix rose more than 25% on Friday in Seoul, its best single-day gain on record if the move holds.
- Samsung Electronics climbed over 20% the same day, joining a broad Asian chip-stock rally.
- Microsoft shares had already gained 16% on Thursday after its Azure cloud division, the part of Microsoft that rents computing power to businesses, grew faster than analysts predicted.
- Amazon jumped more than 9% in after-hours trading after its cloud business also beat expectations.
- The iShares Semiconductor ETF (SOXX), a fund that tracks US chip companies and acts as a quick gauge of the sector's health, surged more than 8% overnight.
Two big earnings reports changed everything. Strong quarterly results from Microsoft and Amazon, both released this week, told investors that the billions of dollars flowing into artificial intelligence infrastructure were not slowing down. Asian chip stocks, which had been battered all week, whipped sharply higher in response.
SK Hynix, the South Korean memory-chip maker whose products sit inside AI servers, led the charge with a gain of more than 25%. Samsung Electronics added over 20%. Two other Korean tech suppliers, LG Innotek and Seoul Semiconductor, rose 11.2% and 7.8% respectively.
What sparked the reversal?
Microsoft reported faster-than-expected growth for Azure, its cloud-computing service, and its shares climbed 16% during Thursday's regular session. Amazon then reported second-quarter revenue above analyst forecasts, driven by its own cloud arm, AWS, sending its stock up more than 9% in extended trading.
The numbers mattered because chip companies like SK Hynix and Samsung sell directly into the data centres that power cloud services. When cloud spending looks healthy, demand for their chips looks healthy too.
Andrew Jackson, head of equity strategy at Ortus Advisors, wrote in a note on Friday that Microsoft's results "sparked a huge rebound for risk-on and AI." He pointed out that investors had been worried about companies throwing money at AI without discipline. Microsoft's management keeping capital spending "in check" reassured the market, Jackson said, noting that a "'spend at all costs' mentality has been punished."
Why had chip stocks fallen in the first place?
The week before Friday's rally had been rough. Investors grew anxious about two things: whether AI company valuations had risen too far, too fast, and whether Chinese memory-chip makers were catching up fast enough to squeeze prices and profits at Hynix and Samsung.
Friday's earnings-driven bounce did not make those concerns disappear. It simply gave investors a fresh data point suggesting AI data-centre demand remains strong enough to keep chipmakers busy.
What does this mean for ordinary people?
If you own shares in a global tech fund or a pension that includes tech stocks, you likely felt this week's swings in both directions. For anyone who uses cloud-based software at work or at home, the broader story is simpler: the world's biggest technology companies are still spending heavily to keep AI services running and expanding.
Japanese chip stocks joined the rally too. Advantest climbed nearly 18%, Disco rose over 13%, Lasertec advanced more than 12%, Tokyo Electron gained almost 9%, and Renesas Electronics added over 10%. SoftBank Group, whose ownership of chip-design firm Arm makes it a closely watched AI bellwether, jumped more than 9%.
CNBC Tech first reported the scale of the individual stock moves.
| Stock | Friday gain | Market |
|---|---|---|
| SK Hynix | +25%+ | Seoul |
| Samsung Electronics | +20%+ | Seoul |
| Advantest | +~18% | Tokyo |
| Disco | +13%+ | Tokyo |
| Lasertec | +12%+ | Tokyo |
Common questions
Why do Asian chip stocks react so strongly to US cloud earnings?
Amazon and Microsoft are among the biggest buyers of the memory chips and specialist processors that South Korean and Japanese firms make. When their cloud businesses grow faster than expected, investors assume chip orders will follow.
Is this rally a sign that AI investment is safe and sound?
It is a sign that two of the largest cloud companies are still growing their AI infrastructure spending. It does not resolve broader questions about whether AI services will generate enough revenue to justify the total investment across the whole industry.
