Asian chipmaking stocks rise tracking Nvidia rebound

Investing.com– Asian chipmaking stocks rose on Wednesday, tracking an overnight rebound in market darling Nvidia as investors looked to an artificial intelligence driven boom in demand over the coming months.

Stocks closely tied to NVIDIA Corporation (NASDAQ:) were the best performers among their peers, after the firm surged nearly 7% in Tuesday’s session. The rebound came after a mix of profit taking and cooling sentiment sparked three straight days of steep losses in Nvidia. 

South Korea’s SK Hynix Inc (KS:), which supplies advanced memory chips to Nvidia, rose 4.2%, while Japanese semiconductor testing equipment maker Advantest Corp. (TYO:), which is also an Nvidia supplier, added 6.6%. 

TSMC (TW:) (NYSE:), the world’s biggest contract chipmaker and one of Nvidia’s biggest suppliers, added 1.1%, while electronics maker Hon Hai Precision Industry Co Ltd (TW:), also known as Foxconn, added 0.5%. 

Nvidia’s rebound, which saw the company reclaim a $3 trillion market capitalization, reflected persistent optimism that the firm will benefit from an AI boom in the coming months.

Nvidia had briefly overtaken Microsoft Corporation (NASDAQ:) to become the most valuable company on Wall Street last week, amid hype over AI.

AI is also expected to boost global chip demand- a notion which saw broader Asian chip stocks advance on Wednesday. Semiconductor Manufacturing International Corp (HK:), China’s biggest chipmaker, rose 1%, while Tokyo Electron Ltd. (TYO:) and Renesas Electronics Corp (TYO:) added 3.2% and 2%, respectively.

Markets were now awaiting more cues on AI-driven chip demand from Micron Technology Inc (NASDAQ:), which is set to report its quarterly earnings later on Wednesday. The firm had clocked stronger-than-expected earnings in the prior quarter on strong demand, and had also presented a stronger outlook.