Shares in chipmakers underpinning AI boom rocket in first half of 2026 | Technology sector

Shares of chipmakers surged in the first half of this year as investors flocked to companies producing hardware powering the artificial intelligence boom, according to analysis.

Investors have increased the value of semiconductor and memory chip makers, whose profits have soared in 2026, at the expense of some large software companies that have fallen out of favor this year.

Share prices of some chip companies have tripled or more since the beginning of January, causing Asia Pacific stock markets to rise sharply.

South Korea’s Kospi index is up 125% this year, its strongest first half since at least 1990, according to Guardian data from the London Stock Exchange Group. This was influenced by electronics group Samsung, whose share prices have increased by 183% so far this year, and SK Hynix, whose share prices have increased by 310% since the beginning of January.

Both have reported a huge increase in demand this year as AI companies compete for chips to power data centers.

US chip manufacturers are also in great demand. Sandisk’s shares are up 780% in 2026 and are up 4,510% in the last 12 months. Digital storage company Western Digital has gained 240% this year, while Micron is up 296% and Seagate is up 226%, with two trading days left until the second half of the year begins.

Dan Coatsworth, head of markets at investment platform AJ Bell, said the four US companies had achieved “the kind of gains in six months that you would normally expect from investing for decades”.

He added: “Demand outstripping limited supply has driven up memory chip prices and sent suppliers’ shares on a meteoric rise. Higher selling prices and greater demand are a powerful cocktail for explosive earnings growth.”

Apple cited the increase in the cost of memory chips as the reason for the increase in iPad and MacBook prices last week. The company is also reportedly It is seeking permission from the Trump administration to purchase memory chips from CXMT, a Chinese company that the Pentagon has blacklisted.

Shares of hyperscalers rolling out AI services have fallen in recent weeks as investors shifted their holdings from software to hardware stocks. This includes Microsoft, which is down 24% in 2026 and hit a one-year low last week.

Some investors have balked at the massive spending plans announced by leading AI companies. This has led to higher debt and will eat into firms’ cash flow, making them more capital-intensive businesses.

There have been signs in recent days that the rally in chip stocks is waning, with stocks reaching recent highs as investors turn to sectors other than technology.

“There is a desire to preserve profits that have been piled into AI and technology since the end of March, and investors continue to be in the mood to sell first and ask questions later,” said Chris Beauchamp, chief market analyst at trading and investing platform IG.

Overall, there have been solid gains in the stock market in the first half of 2026, with Japan’s Nikkei index rising 38%.

Britain’s FTSE 100 Index gained 5.8%, falling from its record peak at the end of February as the Iran war hit share prices. The London stock market has been boosted by takeover offers for a number of companies, with Beazley, DCC, Glencore, Schröders, Segro and Intertek receiving bids from suitors.

Brent crude oil started the year at $60 per barrel and is closing June with an increase of about $12. However, at the end of April, its price doubled to over $120 as the closure of the Strait of Hormuz increased the supply shortage.

The US S&P 500 stock index is up 7.4% so far this year, reaching 7,354 points at the end of last week.

Mark Haefele, chief investment officer of UBS Global Wealth Management, predicts that the US market will rise next year and the S&P 500 will reach 8,200 points by June 2027.

“Our base case sees continued strength in AI capital spending, a resilient US economy, continued fiscal spending around the world and strong credit creation continuing to support corporate earnings growth and markets more broadly,” he said.