AMD, Micron, SK Hynix lead chip stock recovery

Semiconductor stocks led by AMD, Micron Technology, and SK Hynix jumped on Monday, recovering from a 9% drop in the PHLX Semiconductor Index last week. AMD rose 4% after Rosenblatt and UBS raised price targets ahead of its AI conference, while Micron and SK Hynix gained 5% each. The rebound comes as investors weigh competition from Chinese AI startups like Moonshot's low-cost Kimi K3 model, with Deutsche Bank analysts questioning the sustainability of US AI capex.

What happened: Semiconductor stocks jumped on Monday in early trading, recovering from a rout that left the PHLX Semiconductor Index ^SOX https://finance.yahoo.com/quote/%5ESOX/ down more than 9% last week. AI chip heavyweight Nvidia NVDA https://finance.yahoo.com/quote/NVDA/ rose more than 2%, while AMD AMD https://finance.yahoo.com/quote/AMD/ jumped 4% on analyst price target calls. Broadcom AVGO https://finance.yahoo.com/quote/AVGO and Intel INTC https://finance.yahoo.com/quote/INTC were also poised to gain on Monday. Marvell MRVL https://finance.yahoo.com/quote/MRVL and Qualcomm QCOM https://finance.yahoo.com/quote/QCOM/ rose as well, reversing Friday's losses. Memory and storage leaders Micron Technology MU https://finance.yahoo.com/quote/MU/ and SK Hynix SKHY https://finance.yahoo.com/quote/SKHY/ , meanwhile, jumped 5%. Highflier Sandisk SNDK https://finance.yahoo.com/quote/SNDK/ gained more than 3%. Among the semiconductor equipment makers, ASML ASML https://finance.yahoo.com/quote/ASML/ , Applied Materials AMAT https://finance.yahoo.com/quote/AMAT , and Lam Research LRCX https://finance.yahoo.com/quote/LRCX/ edged higher. What's behind the move: Chipmaker AMD was selected as a "top pick" https://finance.yahoo.com/markets/stocks/articles/why-amd-stock-falling-premarket-080908737.html by Rosenblatt, which raised its price target on the stock to $665 from $490. UBS analysts also raised their price target on the stock to $700, maintaining a Buy rating ahead of the chipmaker's annual AI conference this week. Monday's jump in semiconductor stocks comes as investors weigh the risks of growing global competition from Chinese startups such as Moonshot, which unveiled Kimi K3 https://finance.yahoo.com/technology/ai/articles/chinas-moonshot-unveils-worlds-largest-020622030.html , a model that runs at a much lower cost than US models. China's growing ecosystem of open-weight AI models, which enterprises can download, fine-tune, and run on their own infrastructure, calls into question US valuations, particularly after the US withdrew Anthropic's ANTH.PVT https://finance.yahoo.com/quote/ANTH.PVT/ Fable and Mythos models over security concerns. "The immediate market reaction — pressure on AI and semiconductor names — reflects a reassessment of whether the industry's current capex trajectory is sustainable if similar performance can be delivered more cheaply," Deutsche Bank analysts wrote on Monday. What else you need to know: Artificial intelligence costs have been rising. Taiwan Semiconductor Manufacturing Company TSM https://finance.yahoo.com/quote/TSM/ last week guided to higher-than-anticipated capital expenditures, in part due to higher tool prices. Investors will be eyeing Alphabet's GOOG https://finance.yahoo.com/quote/GOOG , GOOGL https://finance.yahoo.com/quote/GOOGL/ quarterly results this week for clues on its continued AI infrastructure spending, as well as any commentary on the tech giant's own AI models. Last week, Bloomberg reported that Alphabet was behind schedule in delivering Gemini 3.5 Pro, its most powerful AI model. Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines ferre . Click here for in-depth analysis of the latest stock market news and events moving stock prices Read the latest financial and business news from Yahoo Finance