Investor fears about an AI spending slowdown and the impact of rate hikes are subsiding

Intel's stock was soaring Thursday.

Chip stocks are staging a sharp rally on Thursday, continuing their comeback from a bruising selloff at the start of the week.

Shares of Intel (INTC) soared 8.3% Thursday morning, while those of AI chip makers Marvell Technology (MRVL) and Advanced Micro Devices (AMD) were up 5% and 4.9%, respectively. Arm Holdings' U.S.-listed shares (ARM) were up 6.7% in morning trading.

Micron Technology's stock (MRVL) was up 6% in Thursday action, while Sandisk's (SNDK) rose 5.7%.

D.A. Davidson managing director Gil Luria said falling oil prices and Treasury yields were likely "removing some of the concerns" investors initially had following Wednesday's Federal Reserve meeting. The central bank made the decision to raise interest rates by a quarter point and opened the door to at least one more hike going forward.

"The data-center buildout is rate sensitive and therefore any sign that interest rates may not move up as much is a positive for the buildout and by extension semiconductor companies," Luria said in emailed comments.

The chip sector had suffered Monday following calls over the weekend from AI leaders including Anthropic CEO Dario Amodei and OpenAI CEO Sam Altman to slow the pace of AI development, which some investors initially worried would have an impact on AI infrastructure spending.

However, chip stocks and shares of server and component makers began to rebound Tuesday as Wall Street analysts expressed that the underlying growth drivers of the AI buildout remained strong.

-Britney Nguyen