SK Hynix and Micron are the latest entrants to reach a market capitalisation of more than $1 trillion, joining the elite club as beneficiaries of the growing demand for (AI). Both companies hit the $1 trillion market cap milestone for the first time, reflecting how strongly the market is responding to companies benefiting from the rapid growth of the AI industry.
Shares of SK Hynix jumped as much as 11 per cent on Wednesday, while Micron shares surged 19 per cent, as investors continued to show confidence in artificial intelligence-linked stocks. SK Hynix, a South Korean company, is a key supplier to AI chip giant Nvidia and plays a crucial role in the global AI supply chain. Micron, on the other hand, manufactures memory chips: the hardware used to store and retrieve data which are separate from processing chips such as Nvidia GPUs.
Exponential demand for AI data centres has led to a global memory shortage that chipmakers such as Micron are struggling to meet, allowing Micron, SK Hynix, and Samsung to raise prices. Micron’s stock has more than tripled year to date.
Earlier in May, South Korea’s Samsung Electronics, best known for its Galaxy smartphones and high-end TVs, joined the $1tn club and became only the second Asian company to reach the milestone after Taiwanese chipmaker TSMC. Its shares continue to rise.
US tech companies are among the biggest beneficiaries of the growing demand for artificial intelligence (AI). Alphabet, Microsoft, and Amazon have all seen demand for their cloud-computing AI services outstrip their ability to build new data centres. Nvidia is the largest supplier of graphics processing units (GPUs) to data centres, while companies like Dell supply AI servers. Meanwhile, Apple is quietly positioning its iPhone and Macs to capitalise on artificial intelligence.
The $1 trillion club may expand further as tech companies increase spending on AI data centres and build the necessary infrastructure to support these services. Investment in artificial intelligence is projected to continue growing at a fast pace through 2027, with Wall Street analysts now estimating total spending to reach $1 trillion.
This year’s spending projections were revised across the industry. with Google parent Alphabet increasing 4 per cent to $185 billion, Amazon rising 1 per cent to $200 billion, Meta climbing 8 per cent to $135 billion, and Microsoft surging 24 per cent to $190 billion, according to a tally by Bank of America.
The CEOs of these cash-rich tech companies remain confident about their artificial intelligence investments and monetisation opportunities. However, investors are still skeptical about the return on investment and are seeking stronger returns.
Intel, Qualcomm, Advanced Micro Devices, and Marvell Technology have also seen their stock prices rise, as the global AI buildout brings positive momentum for chipmakers and infrastructure providers.
