Micron Technology, Intel, AMD, and Sandisk Corp. — among the US-listed chip and memory stocks that powered Wall Street’s AI-driven rally in 2026 — have come under pressure toward the end of the second quarter, as concerns grow that the artificial intelligence-fueled rally may have run too far, too fast, triggering a global technology sell-off during the second half of June.
Investors have become increasingly cautious over whether the massive AI spending commitments by technology companies will generate sufficient long-term returns. Elevated valuations, crowded positioning, and profit-taking after a sharp rally have led to periodic pullbacks in AI-linked stocks.
Adding to the pressure, growing expectations of a potential US Federal Reserve interest-rate hike later this year have weighed on investor sentiment. Concerns also intensified after media reports suggested that OpenAI’s much-anticipated initial public offering (IPO) could be delayed.
Despite the recent correction, chip and memory stocks remain on track for their strongest quarter on record, emerging as the biggest beneficiaries of aggressive AI infrastructure spending by global technology giants.
AI rally faces valuation test despite record quarterly gains
According to a Bloomberg report, the Philadelphia Stock Exchange Semiconductor Index plunged 7.9% last week, marking its worst weekly decline since April 2025, as investors increasingly questioned the sustainability of AI-driven demand for semiconductor stocks. Volatility continued on Monday, with the index swinging from a 3.2% decline to close 3.8% higher.
Such turbulence is not unusual for semiconductor stocks, given the industry’s highly cyclical nature, which has historically experienced periods of rapid expansion followed by sharp corrections.
Even after the recent sell-off, the semiconductor index remains up 81% in the second quarter and is on track to post its strongest quarterly performance on record, with one trading session remaining.
The index has surged 94% so far in 2026 and, if the gains hold, it will mark its best annual performance since the dot-com boom in 1999. In comparison, the tech-heavy Nasdaq 100 has gained 25% during the quarter, while the broader S&P 500 has advanced 14%, according to the report.
The latest rally continues to be driven by robust AI demand. Technology giants, including Microsoft, Amazon, Alphabet, and Meta Platforms, have maintained their aggressive capital expenditure plans to expand AI and data centre infrastructure.
The boom has also propelled several global technology companies into the $1 trillion market capitalisation club. Samsung Electronics crossed the milestone earlier this year amid strong momentum in AI-related memory chips.
Similarly, SK Hynix surpassed the $1 trillion mark in May 2026, driven by soaring demand for high-bandwidth memory (HBM) chips used in AI servers. Micron Technology also joined the trillion-dollar club this year as AI infrastructure spending accelerated.
NVIDIA continues to dominate the AI boom with a market capitalisation of approximately $4.5 trillion (as of Monday’s close), retaining its position as the world’s most valuable listed company.
Micron, Sandisk lead 2026 gains as laggards begin to catch up
Among major semiconductor stocks, Micron Technology, the largest US memory-chip manufacturer, ranks among the best performers this year, with its shares surging 301% over the past six months.
Sandisk Corp. has emerged as the top performer, delivering an extraordinary 764% return during the period.
Western Digital Corp., Seagate Technology Holdings, and Intel Corp. round out the top five performers. Intel has rallied 257% as investors grow increasingly confident that its turnaround strategy is beginning to deliver results.
Meanwhile, South Korean memory-chip maker SK Hynix is reportedly seeking to raise $29.4 billion through a US listing, Bloomberg reported.
Other AI-linked semiconductor names, including AMD, have also posted robust gains this year, supported by sustained demand for AI accelerators and data-centre processors.
However, some of the industry’s biggest names have underperformed. NVIDIA, the face of the AI revolution and the world’s largest listed company, is up just 4.5% so far this year, making it the weakest-performing stock in the semiconductor index. Broadcom, the second-most valuable US chipmaker, has also lagged with gains of only 7.6%, the report showed.
(With inputs from Bloomberg)
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
