Asian chipmakers rally as Nvidia hits $3 trillion valuation on AI hype

Investing.com-- Major Asian chipmaking stocks and Nvidia suppliers rose sharply on Thursday, tracking an overnight rally in the market darling amid renewed optimism over artificial intelligence. 

NVIDIA Corporation (NASDAQ:NVDA) surged to an over $3 trillion valuation for the first time on Wednesday, overtaking Apple Inc (NASDAQ:AAPL) to become the second-most valuable company on Wall Street, behind Microsoft Corporation (NASDAQ:MSFT).

Gains in the stock came amid renewed optimism over demand for artificial intelligence, especially after Nvidia revealed its latest line of AI chips earlier this week. Markets bet that demand from the fast-growing industry will fuel increased demand for semiconductors.

Sentiment towards chipmakers was also buoyed by reports of positive comments from ASML Holding NV (AS:ASML). The semiconductor equipment maker, which is regarded as a bellwether for the chip industry, reportedly flagged improving demand from its biggest customers, chiefly TSMC.

TSMC (TW:2330) (NYSE:TSM) surged nearly 5% to a record high in Taiwan trade, leading gains across Asian chipmaking stocks. The firm is the world’s biggest contract chipmaker, and is also a key supplier to Nvidia. 

Other Nvidia suppliers, such as electronics maker Hon Hai Precision Industry Co Ltd (TW:2317), or Foxconn, clocked small gains. 

Broader Asian chipmakers rallied on the prospect of increased demand. Semiconductor Manufacturing International Corp (HK:0981)- the biggest chipmaker in China- surged nearly 4% in Hong Kong trade.

Smaller peers Will Semiconductor Co Ltd Shanghai (SS:603501) and NAURA Technology Group Co Ltd (SZ:002371) both rose slightly in Shenzhen trade. 

Japanese semiconductor testing equipment makerAdvantest Corp. (TYO:6857) added 5%, while Tokyo Electron Ltd. (TYO:8035)- the most valuable Japanese chipmaker- rose 4.3%. 

Other Japanese chipmakers such as Renesas Electronics Corp (TYO:6723) and  Disco Corp (TYO:6146) rose between 3% and 5%. 

Nvidia saw a massive valuation spike since 2023, as the growing popularity of generative AI tools, such as OpenAI's ChatGPT, sparked a mad dash into the sector. This greatly benefited Nvidia, which makes the most advanced AI chips currently available.

Gains in Nvidia spilled over into the broader chipmaking sector, the growing popularity of AI sparked bets that broader chip demand and technology investment will also improve on the back on AI.