Shares in semiconductor companies advanced Thursday after reports indicated that South Korea’s top tech firms signed initial agreements to supply chips for OpenAI’s Stargate initiative, stoking optimism over rising AI memory requirements.
Micron (NASDAQ:MU) rose 1%, Advanced Micro Devices (NASDAQ:AMD) gained 3%, NVIDIA (NASDAQ:NVDA) added 1%, SanDisk (NASDAQ:SNDK) jumped 4.6%, Lam Research (NASDAQ:LRCX) climbed 2%, Broadcom (NASDAQ:AVGO) rose 3%, and Western Digital (NASDAQ:WDC) surged 4%.
The broad rally followed OpenAI CEO Sam Altman signing letters of intent with Samsung Electronics and SK Hynix to support the data center construction effort. According to the companies, OpenAI may require up to 900,000 wafers per month as the Stargate project scales.
This anticipated demand exceeds twice the current global output for high-bandwidth memory (HBM), underscoring the vast scope of the Stargate initiative and accelerating AI development worldwide.
Yet some market observers remain cautious about the projections. KC Rajkumar of LYNX Equity Strategies noted, “We would love nothing more than our favorite names such as MU, LRCX and SNDK climb higher, but for the right reasons. The 900K estimate coming from the two memory suppliers looks like a typo to us. Even if a zero were to be removed, a 90k wpm projection still would look dubious.”
The OpenAI-led effort is part of a global drive to construct next-generation AI data centers, a massive undertaking expected to cost trillions of dollars and consume enormous amounts of chips, servers, cooling infrastructure, and energy.
Advanced Micro Devices stock price
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.