Chipmakers surge on AI spending hopes as investors look past Middle East tensions

Chipmakers Lead Asian Stocks Rally on AI Spending Momentum

Asian stocks surged on Friday as investors bet on AI growth over mounting geopolitical concerns, with semiconductor shares leading a sharp rebound across regional markets1

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. South Korea's KOSPI jumped 4.2%, clawing back losses after entering bear-market territory earlier in the week, while Japan's Nikkei 225 climbed about 2%1

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. The rally marked a decisive shift as investors focus on AI rather than Middle East tensions, prioritizing long-term AI-driven growth prospects despite fresh U.S. strikes on Iran and retaliatory attacks that threatened global oil supplies3

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Samsung Electronics rebounded 4.9% after leading the week's selloff, while SK Hynix gained 1.5% following the pricing of its blockbuster U.S. American depositary share offering1

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. The firm raised approximately $26.5 billion, with demand exceeding seven times the shares available, signaling robust investor appetite to gain exposure to the AI supply chain3

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. SK Hynix's ADSs began trading under ticker SKHY, giving U.S. investors direct access to one of Nvidia's biggest high-bandwidth memory suppliers, with the stock remaining up roughly 680% over the past 12 months despite recent volatility1

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Record Investment Plans Signal Sustained AI Chip Demand

Micron Technology announced plans to increase U.S. investment to roughly $250 billion through 2035 to expand memory-chip production, providing fresh evidence that AI spending remains on track despite market jitters1

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. The announcement helped lift the Philadelphia SE Semiconductor Index by 3%, as investors regained confidence in the AI boom's sustainability4

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. Wall Street followed suit, with the Nasdaq Composite gaining 0.29% and the S&P 500 climbing 0.42% on Friday.

Demand appears robust for high-end memory chips and data centers powering AI technology, though debate continues around massive spending levels2

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. Samsung Electronics unveiled preliminary quarterly operating profit of 89.4 trillion won (around $58 billion) for the quarter ended in June, nearly 20 times higher than a year ago and surpassing income generated in 2024 and 2025 combined2

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. However, Samsung's stock fell more than 6% in Seoul trading, highlighting sky-high expectations investors hold for chipmakers and concerns about whether AI-driven profit growth can sustain current valuations5

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Markets Shrug Off Geopolitical Risks Despite Oil Supply Concerns

Investors largely dismissed escalating Middle East tensions as the fragile three-week-old U.S.-Iran ceasefire continued eroding with tit-for-tat attacks3

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. Iran's Revolutionary Guards reportedly fired at least two missiles at commercial ships transiting the Strait of Hormuz, causing significant damage but no casualties, while U.S. strikes drew retaliatory missile and drone attacks against U.S.-aligned countries5

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. Despite these developments keeping risks around the Strait of Hormuz and global oil supplies firmly in focus, oil prices remained relatively calm1

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U.S. crude prices fell 0.74% to $71.55 a barrel, while Brent dropped to $75.99 per barrel, down 0.41% on the day3

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. "Oil prices have also remained remarkably calm despite the conflict spilling over (once again) into some neighbouring countries," noted BMO Senior Economist Carl Campus, suggesting underlying optimism regarding ongoing talks may be preventing a bigger surge3

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. Nasdaq 100 Futures rose 0.3% and S&P 500 Futures gained 0.1% in Asian trade as investors prioritized corporate investment and earnings prospects over geopolitical risks1

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Regional Markets Position for Policy Catalysts and Data Releases

Japan's market received an additional boost after reports that the Government Pension Investment Fund (GPIF) is considering increasing its allocation to domestic equities, providing fresh support alongside renewed buying in technology stocks1

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. The yen firmed sharply to 161.71 per U.S. dollar after Japanese Finance Minister Satsuki Katayama's comments suggested repatriation could be in store for Japanese investors, with the currency hanging around its lowest level in 40 years as traders watch for official intervention from Tokyo3

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Focus now shifts to a data-heavy week of regional catalysts, including China's June trade figures, second-quarter GDP, retail sales and industrial production, Singapore's advance GDP estimate, India's June inflation report and the Bank of Korea's policy meeting1

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. Recent central bank meetings highlighted diverging policy paths after Bank Negara Malaysia kept its overnight policy rate unchanged at 2.75%, while the Reserve Bank of New Zealand raised its official cash rate by 25 basis points1

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. On Wall Street, attention remains on U.S. interest rate policy direction, with traders pricing in 34 basis points of hikes for the year, though this may change depending on inflation pressure from the ongoing conflict4

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