U.S. stocks rise on chipmaker gains amid easing Middle East concerns

05/05 U.S. stocks rise on chipmaker gains amid easing Middle East concerns

The U.S. stock market continues to say that the chip shortage could be prolonged due to the IDC report and the announcement of Apple (+2.66 percent), leading the market to rise with a surge in related stocks such as Micron (+11.10 percent). In addition, the stock market’s rise further widened as international oil prices fell sharply due to the U.S. Secretary of Defense’s remarks on the validity of the ceasefire and interest rates on government bonds stabilized downward. Of course, concerns over price pressure were highlighted through the ISM service index or employment indicators, but the impact was limited and Trump said he may order the war to resume later this week, but the impact was also limited. Shortly before the market closed, the rise was maintained (Dow +0.73 percent, Nasdaq +1.03%; S&P 500 +0.81%; Russell 2000 +1.75%; Philadelphia Semiconductor Index +4.23%) although the rise was reduced by news of the shooting of a British cargo ship

*Variants: US-Iran, semiconductors, economic indicators from IDC report and Apple

Tensions such as clashes in the Strait of Hormuz and attacks on the UAE continue, but the market interprets this as a managed tension as the US Secretary of Defense maintains the effectiveness of the ceasefire. On the related note, international oil prices, which surged the previous day, fell, stabilized long-term interest rates, and had a positive impact on the stock market. Of course, Trump mentioned that he might order the resumption of war later this week, but the market no longer seems to care. Immediately after his actual remarks, the impact of the dollar, interest rates and stock markets is limited. This is because the market is focusing only on the positive aspects

IDC, meanwhile, analyzes that the current global semiconductor market is undergoing major changes and that the memory sector is at the center of the changes. In particular, it is diagnosed that AI is leading an unprecedented inflection point in the memory market. Breaking away from the historical pattern of repeating the boom and bust cycle due to the heavy dependence on consumer demand in the past, he stressed that hyperscaler companies are paying to secure supplies by purchasing fundamentally different and more expensive types of memory. IDC expects global DRAM sales to nearly triple this year to $418.6 billion and NAND sales to double to $174.1 billion. Based on the results of related reports, semiconductor companies are leading the index with a sharp rise

On top of that, the news that Apple (+2.66%) admitted that supply chain problems were serious and started discussions with Intel (+12.95%) and Samsung Electronics to diversify chip production also drove the strength of semiconductor companies. The surge in AI demand has led to a shortage of supply from TSMC (-1.79 percent) and shows that it has reached a critical point for hardware companies, further raising tensions between supply and demand of semiconductors. This shows that several hardware companies, including Apple, are making efforts to diversify their supply after HP (+1.68%) announced last quarter that it has begun certification procedures to purchase semiconductor chips with new unknown companies due to supply chain problems. Such news also increases the possibility of a prolonged shortage of semiconductors and affects the surge in related stocks

The U.S. economy is still growing, but it is undergoing a gradual expansion with slowing demand and inflationary pressure. In April, the ISM service industry index continued to expand to 53.6 (54.0 in March), but new orders plunged from 60.6 to 53.5 and the price index remained at 70.7, the highest level since October 2022. In March, JOLTS job postings fell slightly to 686.6 million, but the hiring rate was 3.5%, the highest since May 2024. Nevertheless, the dismissal rate rose to 1.2% and the turnover rate rose to 2.0%, and instability in the job market continued. In the end, the economy is solid, but it suggests that the slowdown in leading demand and high price burdens continue to work at the same time.

*Featured Stocks: Micron Surges Continuously, AMD, Alphabet, Broadcom Gains After Hours

Semiconductors: Nvidia Down Vs. Broadcom Up
Nvidia (-1.00 percent) will go on sale on the grounds that Huawei took up the vacancy after U.S. export restrictions halted sales of AI GPUs in China. Concerns over intensifying competition have also been highlighted in the U.S. Another factor behind Nvidia’s sluggishness is that Broadcom (+2.61%) launched VMware Cloud Foundation 9.1 private cloud platform for production AI workloads that reduced infrastructure costs and increased security. This could affect Nvidia’s ecosystem. TSMC (-1.79 percent) fell on news that Apple is cooperating with Intel. AMD (+4.02%) continued to rise amid earnings expectations. Although the margin ratio was weaker than expected after the close of the market, it was on the rise by around 7% after hours based on solid earnings

Semiconductor Storage: Fitch’s Micron Credit Rating Upgrades and IDC Report Impact Surges
Micron (+11.06%) surged on the back of Fitch’s upward revision of its credit rating amid a stable outlook, citing debt reduction and surging demand for AI-based memory. Furthermore, IDC’s announcement that increased demand for AI will almost triple sales in the DRAM market and more than double NAND sales. As a result, SanDisk (+11.98%) and Western Digital (+5.18) also rose sharply, while Seagate (+4.40%) was strong. Philadelphia’s semiconductor index surged 4.23%

Semiconductor Equipment: Expectations Rise On Positive Report
Ram Research (+6.66%) surged after Seaport Research evaluated that the semiconductor WFE industry is facing a historic boom due to increased demand for AI and computing and increased complexity of semiconductor processes, and that Ram Research, which has strengths in the memory equipment sector, is in the best position. AMAT (+4.97%) also rose on the back of its buying opinion. Semiconductor equipment and parts companies rose, with ASML (+4.09%) also rising.

Data Center High-Speed Connectivity Companies: Credo Jumps Big On Expectations of Explosive Demand
Credo Technology (+7.50%) is expected to see overwhelming earnings growth due to explosive demand for active electrical cable (AEC) and connection solutions for AI data centers and positive reviews from analysts. Connectivity for AI servers