Key points
- Micron (MU) closed up about 12% and AMD about 8% Tuesday, the group's first real back-to-back gain in two weeks.
- SK Hynix's Nasdaq ADR (SKHY) closed up about 14%, its first back-to-back gain since the ADR started trading July 10.
- Bank of America added Micron to its "US 1 List" with a $1,550 target, and Microsoft committed to AMD's new Helios AI platform for Azure.
- AMD, Micron, Super Micro and Taiwan Semiconductor hadn't closed higher two days in a row since July 8 to 10, and the last bounce, on July 17, didn't survive the day.
Chip stocks are having the kind of session that makes the last two weeks look like they happened to a different market. Micron (MU) led the US names into the close, up around 12 percent, but SK Hynix's Nasdaq ADR (SKHY) moved even more, closing up about 14 percent. AMD had its own separate story going, closing up roughly 8 percent, and Marvell (MRVL), Taiwan Semiconductor (TSM) and Super Micro Computer (SMCI) all finished higher by more than 5 percent. What makes today odd isn't just the size of the move, it's what the move is trying to snap: most of this group hasn't put together two green closes in a row in almost two weeks.
The drought this is trying to end
Go back to July 8 through 10, and AMD, Micron, Super Micro and Taiwan Semiconductor all closed higher for at least two straight sessions. That hadn't happened since, until today. Taiwan Semiconductor fell seven sessions in a row from July 9 to 17, even after it beat earnings estimates for a seventh straight quarter, a record the market completely ignored. Micron fell almost 30 percent peak to trough between its June 22 high and its July 17 low, dragged down with the rest of the memory chip complex. Super Micro closed lower six sessions in a row through Monday.
The closest thing to a turn came on July 17, when Micron slid at the open and then flipped positive within the hour. It didn't hold. By the close that Friday, Micron finished lower than Thursday anyway, and so did most of the rest of the group. That's been the pattern all month: a sharp intraday bounce that fades before the bell, then another red day. Today broke it, since most of these names were already green Monday before today's bigger move stacked on top of it.
SK Hynix's Nasdaq ADR (SKHY) fits the same pattern in miniature, on a shorter clock. The ADR only started trading July 10, and in the two weeks since, every single up day had reversed by the next close, including a 27 percent one-day spike on July 14 that gave back almost all of it within two sessions. Today's close is its first back-to-back gain since it started trading.
What's actually behind today's move
Bank of America analyst Vivek Arya added Micron to the firm's "US 1 List" of top picks Tuesday and reiterated a Buy rating with a $1,550 price target, arguing that "open-source, lower-cost Chinese AI models will ultimately fuel even greater memory demand." Memory names moved together on the call: SK Hynix's Nasdaq ADR closed up about 14 percent, and SanDisk and Western Digital each closed up around 12 percent. Stronger July export data out of Taiwan and South Korea, covered in more detail in today's Kospi recap, added to the case that AI-driven chip demand is recovering rather than slowing.
AMD isn't riding the memory story at all. Word leaked Monday that Microsoft would run Azure workloads on AMD's next-generation Helios AI systems, and the stock gapped up more than 4 percent at Monday's open. It faded through the day and closed up only about 1.6 percent, a quieter number than some of the early headlines suggested. Today the story caught up to the stock: AMD closed up about 8 percent. Two analysts moved on it fast:
- Rosenblatt: price target raised to $655 from $490
- UBS: price target raised to $700 from $670
So today's chip rally is really two stories stacked on top of each other, a memory upgrade lifting Micron and SK Hynix, and a cloud contract lifting AMD, and they happen to be landing on the same Tuesday.
| Stock | Tuesday's close |
|---|---|
| SK Hynix ADR (SKHY) | +13.7% |
| Micron (MU) | +12.0% |
| AMD | +8.1% |
| Super Micro Computer (SMCI) | +7.0% |
| Marvell (MRVL) | +6.6% |
| Taiwan Semiconductor (TSM) | +5.5% |
| Vertiv (VRT) | +4.4% |
| Constellation Energy (CEG) | +3.5% |
| Arista Networks (ANET) | +3.1% |
| Broadcom (AVGO) | +2.1% |
| Nvidia (NVDA) | +1.9% |
Whether it actually holds
These are Tuesday's closing numbers, and this time the gains held. Every name in the group finished green, the first confirmed back-to-back close for this group since July 8 to 10. The next test is Wednesday: does a third straight up day show up, or does this reverse the way the July 17 bounce did within days. One big session doesn't undo Micron's 30 percent slide from June, and it doesn't erase the volatility running through the rest of the small-cap AI names we've been tracking either. It just means the trade that couldn't string two good days together finally did, for at least one day.
