On January 6, a noteworthy shift in the stock market occurred, powered by a significant surge in semiconductor stocksWithin just two hours of the trading session, the Nasdaq index experienced an impressive increase of nearly 2%, while the S&P 500 enjoyed a rise of about 1.3%. Notably, the Philadelphia Semiconductor Index soared by almost 4%, reaching its highest level since July 23 of the previous year.

Among the individual stocks that garnered attention, NVIDIA, often touted as the "darling of AI," reflected a remarkable surge, climbing over 5%. This marked the first instance since November 2024 that NVIDIA's stock price crossed the critical threshold of $150, edging closer to its intraday peak of $152.89 set on November 21. The company appears poised to achieve a record closing high, reflecting a steady upward trend over the first three trading days of the year.

This bullish momentum wasn't limited to U.S

markets, as semiconductor stocks rallied across Asia and Europe as wellSouth Korean giants, SK Hynix and Samsung, saw their stock prices increase by nearly 10% and 3% respectivelyIn tandem, Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chip foundry and a crucial supplier for NVIDIA, reached new heights in its Asian stock priceTSMC's American stocks also experienced a remarkable 5.4% increase, setting yet another record.

Further contributing to this bullish sentiment were significant movements from global key semiconductor equipment manufacturersASML, a critical player in the semiconductor equipment industry, saw its European stock price jump over 8%, and its U.Scounterpart exceeded 9%. Another Dutch company, ASM International, rose by 6.5%, while major German competitors like Infineon and European chip foundry STMicroelectronics both experienced gains of over 8%.

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stock market, AMD, a prominent competitor to NVIDIA, posted a 4% increase, while memory chip manufacturers Micron Technology and AI server supplier Advanced Micro Devices (AMD) noted a substantial uptick of more than 10%. Chip manufacturing equipment stocks, including Applied Materials, KLA, and Lam Research, gained approximately 5%. However, Broadcom's gains retraced significantly after an initial 4% rise, while Intel, which had a 2% gain early in trading, shifted into negative territory by midday.

At the close of trading, both NVIDIA and TSMC achieved record highs, though NVIDIA did not maintain the $150 mark, ending up 3.4% higherTSMC's U.Sstocks climbed 5.5%. On the contrary, Intel faced a decline of over 3.3%, whereas Micron Technology retained more than a 10% surge, and AMD rose by over 9%. Notably, the Philadelphia Semiconductor Index finished up 2.8% for the day.

One of the primary catalysts for the semiconductor stocks’ strong performance is the promising outlook presented by key company earnings reports, which suggest a sustained demand for AI technology into the new year

Analysts reason that Foxconn, a global leader in electronics manufacturing, reported record high revenues for the fourth quarter of 2024, driven by robust AI demand leading to double-digit sales growthThis served as a key driver for the rally in semiconductor stocks on Monday.

The firm’s performance significantly reflects the ongoing growth in AI demand, particularly for AI servers, indicating that the current enthusiasm surrounding artificial intelligence is likely to persist in the coming yearIn the past, there had been concerns regarding the sustainability of massive AI capital expenditures by businessesHowever, the stock market's substantial gains over the past year, driven in part by a surge in AI interest, left investors eager to see if this trend would continue.

Foxconn, the world’s largest electronics manufacturing services provider, noted in a weekend statement that revenue for the October to December 2024 quarter would increase by 15% year-over-year, setting a record for that period

Despite experiencing month-over-month declines in revenue for November and December, year-over-year figures remained positiveDecember alone saw revenue exceed previous years by more than 42%, marking it as one of the best months in its history.

The company underscored the strong market demand for AI servers and new computational products, while also indicating growth in its automotive-related businessThe computing products division demonstrated a "robust growth," although the smart consumer electronics segment experienced a slight year-over-year revenue dip due to production issues.

Moreover, Foxconn’s guidance for the first quarter of this year indicates strong confidence in AI demands, anticipating "significant growth compared to the previous year." Analysts suggest that the thriving sales performance toward the end of last year was primarily propelled by growth in cloud computing and networking products, many of which encompass AI servers designed by chipmakers like NVIDIA

Foxconn is set to release its complete fourth-quarter financial report on March 14.

Another critical factor driving semiconductor stock momentum is the positive signals from major tech companies like Microsoft and OpenAI regarding strong AI demandThese developments have further helped uplift the semiconductor sectorMicrosoft announced its plans last Friday to invest $80 billion in developing data centers capable of handling AI workloads in fiscal 2025, with over half of that investment slated for the United StatesOpenAI’s CEO, Sam Altman, noted that the computing power required for customers using their ChatGPT Pro products was so substantial that the $200 monthly subscription model was incurring losses for the company.

The market is also eagerly anticipating NVIDIA CEO Jensen Huang's keynote address at the 2025 Consumer Electronics Show, a major event in the tech industry

Mizuho Securities analyst Jordan Klein pointed out that attendees are hoping Huang will provide insights on the upcoming next-generation GPUs, particularly the Rubin and other novel products, possibly signaling further support for the semiconductor industry.

Additionally, some analysts believe that Foxconn's strong performance offers optimistic signals for NVIDIA's strongest chip, Blackwell, particularly regarding production expansionThis development conferred greater upward momentum to Micron Technology and South Korea's SK Hynix, both significant suppliers of high-bandwidth memory chips for NVIDIA.

According to research firm TrendForce, the market for AI servers is projected to expand from $20.5 billion in 2024 to $29.8 billion in 2025. By the end of this year, AI servers are expected to account for more than 70% of the total sector value of all serversThis significant growth potential highlights the increasing relevance and dependence on AI technology in various sectors, further fueling interest and investment in semiconductor stocks.