Artificial intelligence chipmakers saw strong momentum this week as corporate earnings, cloud computing contracts, and surging demand for AI infrastructure fueled gains across the sector.
Nvidia (NASDAQ:NVDA), Broadcom (NASDAQ:AVGO), Marvell (NASDAQ:MRVL), and Advanced Micro Devices (NASDAQ:AMD) were among the beneficiaries, lifted by a series of developments involving Oracle (NYSE:ORCL), OpenAI, Microsoft (NASDAQ:MSFT), and Taiwan Semiconductor Manufacturing Co. (NYSE:TSM).
Oracle (NYSE:ORCL) reported fiscal first-quarter earnings of $1.47 per share on revenue of $14.92 billion, up from $13.3 billion a year earlier but shy of consensus estimates.
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Cloud revenue climbed 27% to $7.2 billion, led by 54% growth in infrastructure-as-a-service. Multi-billion-dollar contracts pushed backlog up 359% to $455 billion.
CEO Safra Catz forecast Oracle Cloud Infrastructure revenue to grow 77% this fiscal year and hit $144 billion within four years.
Analysts credited the quarter to robust AI infrastructure demand. Oracle also secured a five-year, $300 billion deal with OpenAI, starting in 2027, to provide cloud capacity for its Stargate data centers.
Microsoft reached a separate agreement with OpenAI that relaxes exclusivity on Azure, while boosting investment in in-house AI chips to reduce supplier reliance.
Taiwan Semiconductor reinforced demand momentum with August revenue of 335.77 billion New Taiwanese dollars, up 3.9% from July and 33.8% year-on-year. Cumulative sales rose 37.1% to 2.43 trillion New Taiwanese dollars.
Broadcom posted third-quarter revenue of $15.95 billion, up 22% year-over-year, with AI revenue soaring 63% to $5.2 billion. The company confirmed a $10 billion custom AI chip order from OpenAI and guided fourth-quarter AI chip sales to $6.2 billion. CEO Hock Tan cited “immediate and substantial demand,” lifting long-term growth targets.
AI investment from Big Tech remains the key driver. Meta Platforms (NASDAQ:META), Microsoft, and Alphabet (NASDAQ:GOOGL) are projected to spend more than $240 billion on AI infrastructure by 2026, cementing what Wedbush’s Dan Ives called a “watershed moment” for technology.
The PHLX Semiconductor Index has gained over 20% year-to-date, rising 6% in the last five days. Nvidia and Broadcom, up 32% and 55% year-to-date, respectively, saw their shares rise 6% and 7% in the same period. However, Marvell gained 4% after plunging 40% year-to-date, while AMD lost 4% despite being up 29% year-to-date.
Price Action: NVDA stock is trading higher by 0.27% to $177.65 premarket at last check Friday. AVGO is up 0.31% and MRVL is up 1.59%.
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