Remember when everyone was panicking about chip stocks last week? Yeah, well, they’re back with a vengeance today, and it’s like watching your favorite underdog team suddenly remember how to play.
NVIDIA and AMD are leading the charge this morning, and honestly, it couldn’t have come at a better time. NVIDIA got a nice little boost when Foxconn (you know, the folks who make your iPhone) reported profits jumped 17% year-over-year. More importantly, they’re basically saying “AI demand is going to be bonkers through 2026.” Translation: NVIDIA’s golden goose isn’t going anywhere.
Meanwhile, AMD decided to throw their own party yesterday with a Financial Analyst Day that was basically them saying, “Hey, remember us? We’re also really good at this AI thing.” The stock jumped over 5% because apparently, investors needed a reminder that AMD isn’t just sitting around watching NVIDIA have all the fun.
But here’s where it gets interesting (and a little weird): Palantir, the data analytics darling that’s been on an absolute tear, is actually down 2% today. No bad news, no drama – it’s just testing its 50-day moving average like a cautious swimmer dipping their toe in the water. Sometimes the market just needs to take a breather, even from the hottest stocks.
The bigger picture here is that tech leadership is reasserting itself, which is finance-speak for “the cool kids are back at the popular table.” What’s even better is that market breadth is improving – that’s when more stocks start participating in the rally instead of just the usual suspects carrying all the weight.
Here’s a nerdy but important detail: 55% of S&P 500 stocks are now trading above their 50-day moving averages. That might sound boring, but it’s actually a big deal. When that number hits 60%, combined with the VIX (the market’s fear gauge) chilling out below 17, it usually means the rally has real legs.
And speaking of the VIX, it’s currently bouncing around that magical 17 level, which traders treat like a “buy zone” traffic light. Green means go, and we’re getting close to green.
The really fun part? It’s not just the mega-cap tech stocks getting love. Speculative themes like nuclear, quantum computing, and those flying car companies (eVTOL) are starting to attract the “fast money” crowd again. When volatility settles down and traders get their confidence back, these higher-risk, higher-reward sectors could see some serious action.
Bottom line: The chip rally isn’t just about semiconductors bouncing back from a rough patch. It’s about the market remembering why it fell in love with tech in the first place. AI demand isn’t going anywhere, data centers need more chips, and companies like AMD and NVIDIA are sitting pretty in the driver’s seat.
The tape still needs to prove itself above key resistance levels, but the path higher is definitely opening up. Just remember – in this market, leadership is expanding, not rotating away. That’s usually a very good sign for what comes next.