Semiconductor stocks staged a strong recovery in premarket trading Thursday, with Micron Technology, Advanced Micro Devices, and Intel all posting gains of over 2.5%. The bounce comes after two sessions of heavy profit-taking that had raised concerns about stretched valuations in the AI hardware trade.
Micron rose 3.5% to $982.05, while AMD and Intel each gained more than 2.5%, supported by a flurry of Wall Street target upgrades that restored investor confidence. The rebound follows a sharp selloff across Asian and U.S. markets, where investors briefly questioned whether the AI chip rally had run too far, too fast.
Dip-Buying Returns After Global Rout
The reversal began after one of the steepest global chip selloffs of the year. Samsung Electronics reported a record second-quarter operating profit of 89.4 trillion won, driven by AI memory demand, but the results triggered a sell-the-news reaction. South Korea's Kospi entered technical bear-market territory on Wednesday, falling 22.8% from its June peak, as Samsung lost 6.3% and SK Hynix dropped 5.7%.
By Thursday, dip-buying had returned. Kioxia rose 8.3% in Japan, while Samsung and SK Hynix also gained as investors rotated back into memory names ahead of SK Hynix's U.S. listing. The broader Asian tech rebound was also supported by easing oil price pressures, as noted in Samsung and SK Hynix Lead Asian Tech Rebound as Oil Surge Pressures Bonds.
Analysts Stand Firm on AI Cycle
The rally has traction because analysts have not treated the pullback as a break in the AI cycle. Bank of America's Vivek Arya reiterated a Buy rating on Micron with a $1,550 price target, arguing that global cloud and AI infrastructure spending could reach $1.5 trillion by 2027, with 35%-40% directed toward memory components. He emphasized that memory is shifting from a cyclical product to a strategic AI resource.
UBS also raised its DRAM contract-price forecasts, now expecting DDR prices to rise 32% quarter-on-quarter in the third quarter, nearly double its earlier 17% estimate. For AMD, Goldman Sachs analyst James Schneider raised his target to $640 from $450, citing strong AI demand and the growing role of high-performance CPUs in agentic AI workloads.
Intel's Turnaround Story Gains Traction
Intel's rebound is more about a turnaround narrative. HSBC analyst Frank Lee doubled his Intel target to $200 from $100, saying server CPU growth and the foundry business could deliver more value than investors expect. HSBC expects design commitments in Intel Foundry to begin in the second half of 2026. However, the $200 target is far above broader Street expectations, and the thesis depends heavily on foundry customers converting early engagement into real commitments.
Despite the bullish notes, risks remain. Bank of America issued a bubble-risk warning for technology and semiconductor stocks earlier this month, highlighting how crowded the trade has become. The next test arrives quickly: SK Hynix's Nasdaq ADRs are due to begin trading on July 10, after a $28 billion U.S. share sale that was reportedly more than seven times oversubscribed. That debut will be a real-time measure of investor appetite for AI memory exposure.
For context on broader market dynamics, see Bitcoin Stalls Near $62K as Oil Surge, Fed Caution, and Strategy Sales Weigh and Evening Digest: Oil Surges 5% on US-Iran Tensions; Bitcoin Dips Below $62K.
This article is for informational purposes only and does not constitute financial advice.
