Semiconductor Index Rises 60 Percent Year to Date on AI Demand

The PHLX Semiconductor Index has gained 60 percent year to date and more than 131 percent over the past twelve months. Semiconductor analysts said the artificial intelligence spending boom continues to reshape the chip industry and drive long-term demand across memory, networking, power semiconductors, and AI infrastructure companies.

Partners analyst Jay Goldberg told CNBC on Saturday that AI demand is a major force spreading through the semiconductor industry. The demand initially benefited NVIDIA Corp and Broadcom Inc before expanding into networking, memory, and semiconductor equipment stocks.

Goldberg said AI-driven demand is fundamentally changing parts of the industry, particularly the memory markets, where companies are now securing long-term supply contracts that were historically difficult to obtain.

While remaining positive on the long-term AI cycle, Goldberg warned that semiconductor stocks may face periodic pullbacks because markets currently expect near-perfect execution from companies riding the AI wave. He also identified power semiconductor companies such as ON Semiconductor Corp and Texas Instruments Inc as beneficiaries of the expanding demand.