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ARE CHIP-RELATED COMPANIES DEFYING TALKS OF ROTATION?

U.S. chipmakers and memory-related stocks appear to be carrying their strong momentum from 2025 into the new year despite signs that the rally on Wall Street might be looking for new leaders in sectors such as industrials.

Memory and data storage makers - which were some of the best performing stocks in 2025 - remain undeterred with shares of Micron Technology MU.O up 7.9% on Friday.

Data storage device maker SanDisk SNDK.O is up 0.4%, while Seagate Technology STX.O and Western Digital WDC.O are climbing 3.3% and 0.9%, respectively. Retail traders have piled into these stocks expecting the crunch in demand could tighten supply and lift prices.

The Philadelphia SE Semiconductor index .SOX has surged 12.5% so far this year, putting it ahead of the broader S&P 500 .SPX which has gained 1.5% during the same period.

Chipmakers are running at full-throttle even as investors were seen rotating to defensive pockets of the market like healthcare and out of technology stocks, while small-caps are also in vogue amid concerns over elevated AI-capex spending and stretched valuations.

Blockbuster fourth quarter earnings from the world's main producer of advanced AI chips TSMC 2330.TW on Thursday spurred a rally in chip stocks around the world.

Intel INTC.O has had a spectacular run, thanks to optimism over its next-generation 18A chip manufacturing process, with key upgrades from analysts at KeyBanc, Citi and Melius Research this month.

Its stock has risen 30.5% so far this year and it's the best-performing stock in the Nasdaq 100 index .NDX, while SanDisk's 72% surge makes it the highest percentage gainer in the S&P 500.

(Avinash P)

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