The Philadelphia Semiconductor Index has climbed roughly 64% since late March. Nathan Peterson, Director of Derivatives Research and Strategy at Schwab, framed last week’s action around a single dominant theme on the firm’s Market Update podcast: “The driving engine behind last week’s push higher in stocks continued to be the AI infrastructure plays, especially in the chip stocks.” Last Friday alone tacked on another 5.5% for the index, capping a week that saw mega-cap chip names move with a ferocious velocity.
Chip Stocks Are Driving the Market’s Returns
Intel (NASDAQ:INTC | INTC Price Prediction) has tripled since late March, with Friday’s nearly 14% spike fueled by reports that the company will build chips for Apple. The move follows a Q1 earnings report where Intel posted non-GAAP EPS of $0.29 versus an estimated $0.01, and Data Center and AI revenue of $5.05 billion, up 22% year over year. CEO Lip-Bu Tan told investors the “next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic.”
Advanced Micro Devices (NASDAQ:AMD) added fuel after CEO Lisa Su once again revised longer-term growth expectations higher following Tuesday’s earnings. Data Center revenue jumped to $5.78 billion, up 57% year over year, and Q2 guidance points to roughly $11.2 billion in revenue. Memory leaders Micron Technology (NASDAQ:MU) and SanDisk (NASDAQ:SNDK) joined the move, with SanDisk surging nearly 17% on Friday on top of a fiscal Q3 report showing revenue of $5.95 billion, up 251% year over year.
The Breadth Problem
Infotech climbed 2.58% Friday, while no other sector advanced by even 0.6%, and 5 of 11 S&P sectors closed lower. Industrials and financials finished in the red, a blow to stocks that track cyclical economic trends.
Even with the S&P 500 near record highs, only 52% of S&P 500 stocks are trading above their 50-day moving averages.
Private Credit Joins The Trade
Bloomberg reported that Apollo and Blackstone are considering $35 billion in financing for Broadcom. Broadcom (NASDAQ:AVGO) posted fiscal Q1 AI semiconductor revenue of $8.4 billion, up 106% year over year, with CEO Hock Tan guiding Q2 AI revenue to $10.7 billion and targeting $100 billion in AI sales by 2027.
With private credit now financing AI infrastructure alongside public equity buyers, the capital stack behind this trade is deepening just as broader market breadth thins.
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