Memory Maker Micron Powers 70% SOX Rally, Analysts Warn Mania
MU•The Philadelphia Semiconductor Index has surged 70% since March 30 lows, with memory maker Micron helping fuel an AI chip frenzy that lifted the S&P 500 to 7,500. Strategists warn this 'borderline mania' echoes 1999 tech bubble euphoria despite current chip valuations still below dot-com highs.
1. Semiconductor Rally Accelerates
The Philadelphia Semiconductor Index (SOX) has climbed roughly 70% since the March 30 market lows, propelled by surging AI applications and robust sales forecasts from memory suppliers, notably Micron. This rally has driven the broader S&P 500 to a record 7,500, underscoring technology’s dominant market influence.
2. Caution Signals Emerge
Despite strong earnings and bullish guidance, market strategists caution that the pace resembles a classic bubble phase, with Interactive Brokers labeling it 'borderline mania.' While valuations remain below 1999 peaks, lingering concerns over energy costs and delayed central bank rate cuts raise questions about the rally’s durability.
3. AI Chip Landscape Expands
Leading AI chipmakers are also commanding attention: Nvidia recently topped a $5.5 trillion valuation and Cerebras soared 68% on its IPO debut. Observers note that networking and infrastructure firms could join memory vendors in capturing investor enthusiasm as AI deployment broadens.
