Asian chip stocks follow Nvidia’s rise on AI hopes By Investing.com

Investing.com– Shares in the Asian chipmaker rose on Thursday, tracking an overnight rally in Nvidia after CEO Jensen Huang offered encouraging comments on AI-driven demand.

Nvidia suppliers, including TSMC (TW:) (NYSE:), SK Hynix Inc (KS:), Honor Hai Precision Industry (Foxconn) (TW:) and Advantest Corp. (TYO: ) up between 4% and 8%.

Broader chip production stocks also advanced with Japan’s Tokyo Electron Ltd. (TYO:) and Renesas Electronics Corp (TYO: ) up 3.3% and 1.5%, respectively. SoftBank Group Corp. ( TYO: ), which has exposure to chipmaking through its subsidiary Arm, added 7.4%.

The memory chip giant Samsung Electronics Co Ltd (KS:) rose 1.4 percent after Reuters reported the firm was considering a series of global job cuts of up to 30 percent in some of its divisions.

Semiconductor Manufacturing International Corp (HK: ) – China’s largest chipmaker – rose 0.4 percent, while internet giants Alibaba Group (NYSE: ) (HK: ), Baidu Inc (HK: ) (NASDAQ: ) and Tencent Holdings Ltd (HK: ) rose between 1% and 3%.

The tech gains followed an 8.1% rise in NVIDIA Corporation (NASDAQ: ) on Wednesday — the chipmaker’s best day in more than six weeks.

Nvidia CEO Huang said the company is seeing strong demand for its top AI chips, including the upcoming Blackwell line, and is also facing a possible supply shortage due to increased demand for its chips.

His comments helped Nvidia bounce back from a bruising loss last week after Nvidia executives were seen selling some shares. Nvidia’s current-quarter revenue and margin guidance, released in late August, also missed some lofty expectations.

But the stock was still trading up about 150% year-to-date in 2024 after seeing a stellar run on hype over AI-fueled demand. Huang said companies cannot escape the need for more processing power, pointing to increased demand for chips due to higher computing and data center requirements.

Huang’s comments fueled bets that AI demand will help the tech industry avoid a broader downturn in economic conditions.