Microsoft and Meta Earnings 'Repair' AI Faith; Chip Index Posts Largest Intraday Gain Since April as Data Center Supply Chain Surges

Microsoft and Meta both dispelled market concerns about a slowdown in AI investment through their earnings results and capital expenditure plans, leading to a long-awaited major rebound in AI concept stocks on Thursday. The entire AI industry chain, including chips, data centers, and power infrastructure, showed strong performance.

During Thursday's US trading session, AI concept stocks rebounded broadly, driven by earnings reports from large technology companies and expectations of continued increases in AI capital expenditures. The VanEck Semiconductor ETF (SMH), which tracks the semiconductor sector, rose more than 7% intraday. The ETF had fallen 14% over the previous five trading sessions, hitting its lowest level since April this year on Wednesday. The S&P 1500 Semiconductor & Semiconductor Equipment Index rose 7.6% intraday, marking its largest intraday gain since April.

Among chip stocks, AMD, Micron Tech, and Intel all rose more than 10% during Thursday's session. TSMC ADRs gained over 7%, Nvidia rose about 3%, and Broadcom increased by approximately 4%. Stocks related to data center infrastructure, power equipment, and nuclear power also strengthened simultaneously. Bloom Energy surged nearly 30% intraday, Oklo rose more than 10%, NuScale Power gained nearly 10%, GE Vernova increased by over 8%, and Vertiv rose more than 4%.

Microsoft and Meta Earnings Reaffirm AI Investment Boom; Capital Expenditure Expectations Boost Supply Chain

The core catalyst for this round of rebounds came from the latest earnings reports released by Microsoft and Meta.

Microsoft's earnings report, released after hours on Wednesday, showed that in the company's fourth fiscal quarter ended in June, revenue growth in its cloud business, Azure, continued to accelerate, with a year-over-year increase of 43%. Demand for AI business remained robust, and the company signaled continued expansion of data center construction and AI infrastructure investment, further reinforcing the market's view that the AI capital expenditure cycle is still in an expansion phase.

Meta also delivered results far exceeding market expectations and raised its full-year capital expenditure guidance. The company explicitly stated that it would continue to invest heavily in AI infrastructure construction to support its ad recommendation systems and AI product development.

Media outlets pointed out that the world's two largest entities for AI capital expenditures have once again confirmed that they will not slow down their investment pace, serving as an important catalyst for the valuation repair of the entire AI industry chain.

Barclays analyst Brendan Lynch stated, "Microsoft management's comments provided positive signals for the continued growth of future data center demand."

Research firm Vital Knowledge also noted that within the past 24 hours, the AI sector has seen multiple positive catalysts, including better-than-expected earnings from Microsoft and semiconductor equipment leader Lam Research, strong results from several industrial companies, and OpenAI's disclosure of continued rapid growth in annual recurring revenue (ARR). These factors collectively strengthened market confidence that the AI investment cycle is still accelerating.

Semiconductor Sector Sees Collective Repair; Samsung and Lam Research Earnings Further Reinforce AI Logic

In addition to Microsoft and Meta, the latest earnings reports from two companies in the chip supply chain further reinforced the market judgment that AI demand remains strong.

Samsung Electronics reported earnings showing that, against the backdrop of sustained expansion in AI servers driving strong demand for high-end memory such as HBM, the company's chip business profit surged approximately 250 times year-over-year, once again confirming that the semiconductor boom cycle driven by AI is continuing.

Semiconductor equipment leader Lam Research emerged as one of the best-performing large-cap technology stocks of the day. After announcing earnings and guidance that exceeded expectations, its stock price rose more than 20% intraday. The market believes that Lam's orders and outlook indicate that wafer fab expansion is continuing, with no signs of cooling in AI computing power investment.

Chip design company Arm saw its stock price rise nearly 7% intraday after releasing its earnings. Although the smartphone market remains weak, the data center business continues to grow, providing some support to the market.

In contrast, Qualcomm was one of the few large-cap chip stocks to fall against the trend. Although the company's latest earnings met expectations, its profit guidance was conservative, indicating that the recovery in the smartphone market remains sluggish. Its stock price fell about 3.5% intraday.

Data Center and Power Infrastructure Sectors Surge Simultaneously

The expansion of AI capital expenditures has not only boosted chip stocks but also driven a comprehensive rise in sectors related to data center construction.

The S&P 500 Construction & Engineering Index rose as much as 16% intraday, marking its largest daily gain since 2008. Market expectations suggest that as large technology companies continue to expand AI data center construction, companies involved in power equipment, engineering construction, and energy supply will continue to benefit in the coming years.

During the session, fuel cell company Bloom Energy rose nearly 30%, nuclear energy concept stocks X-Energy and Oklo gained more than 10%, NuScale Power rose nearly 10%, GE Vernova increased by about 8%, and construction machinery leader Caterpillar rose approximately 4%.

Meanwhile, data center operators and companies related to computing infrastructure also surged. Hut 8, MARA Holdings, and TeraWulf rose nearly 20% intraday, Iren gained nearly 30%, and Cipher Digital and CleanSpark rose more than 20%.

Market Re-bets on Long-Term AI Investment Cycle

After several consecutive days of adjustments, market sentiment has clearly improved.

Bloomberg pointed out that investors had previously worried about the excessively long return period for AI investments, high capital expenditures, and pressure on the profitability of large technology companies, leading to consecutive sell-offs in AI concept stocks.

However, the latest earnings reports from Microsoft and Meta once again proved that AI-related businesses are maintaining high-speed growth. Moreover, instead of cutting capital expenditures, both companies have further reinforced their plans to continue investing in AI infrastructure in the coming years.

For the market, this means that the AI investment cycle is far from over. From GPUs and HBM memory to semiconductor equipment, data center construction, power equipment, and energy supply, all links in the AI industry chain are expected to continue benefiting. This has become the core logic behind the broad counterattack of AI concept stocks on Thursday.

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