U.S. chipmakers pushed equity benchmarks higher on Friday as Intel's unexpectedly upbeat revenue forecast revived optimism that the artificial intelligence investment cycle powering this year's semiconductor rally is continuing at pace. The Philadelphia SE Semiconductor Index rose 2.5% to an all-time high and appeared set to prolong a run of record single-day closes to 18. The index has advanced more than 42% so far this year.
Market participants have pointed to the massive capital allocation by technology companies into AI hardware as a central driver of the sector's performance. "The AI build-out race is still on. We are seeing solid results, especially for semiconductors and no sign that demand for AI is slowing down," said Angelo Kourkafas, senior global investment strategist at Edward Jones.
Analysts' estimates show the semiconductors sub-industry is expected to deliver steep first-quarter earnings growth of 104.9%, markedly higher than the broader S&P 500 information technology sector, which is projected to record earnings growth of 46.2%, according to LSEG I/B/E/S data.
Intel led the charge on Friday, jumping 22.3% to surpass its dotcom-era peak in 2000 after publishing a robust revenue outlook that market participants read as evidence of strong CPU demand. Rival chipmakers also saw substantial moves: AMD gained 11.8% and Arm climbed 8.1%. Nvidia, which remains the world's most valuable company and was a major driver of last year's chip rally with its GPU demand, rose 1.2%.
U.S. technology stocks largely absorbed a preview of a new AI model from Chinese startup DeepSeek without substantial negative reaction. DeepSeek's low-cost AI model had unsettled markets last year, but investors appeared less concerned this time. "Over time, people have come to realize that actually they’re not the threat that they seemed to be. The market’s saying, 'Hang on, we’re not going to be bitten twice with this,'" said David Morrison, senior market analyst at Trade Nation.
Valuation metrics show the Philadelphia semiconductor index trading at around 26.6 times its 12-month forward earnings estimates, versus about 20.7 for the S&P 500.
Analog chipmaker Texas Instruments also provided guidance that pointed to strength in its business, forecasting second-quarter revenue and profit above estimates on Wednesday and pushing its shares to a record high earlier in the week. On Friday, however, Texas Instruments was last down 2.4%.
For individual investors weighing opportunities, promotional tools and model-driven strategies have been cited in market commentary. One such tool evaluates Intel alongside thousands of other companies monthly using more than 100 financial metrics and employs AI to screen for favorable risk-reward setups. That service notes notable past winners including Super Micro Computer (+185%) and AppLovin (+157%).
Context and implications
The latest moves underscore both the concentration of market gains within semiconductor names tied to AI hardware and the degree to which company forecasts and earnings expectations are driving sector performance. While Nvidia's GPUs were a dominant force in last year's rally, Friday's session highlighted renewed investor focus on CPUs and broader chip supply chains.