The market capitalization of two chip companies has risen above a trillion dollars, driven by the skyrocketing demand for AI chips used to set up data centers. Shares of Micron and SK Hynix have rallied and raised the stock valuation of the firms to above one trillion.
On Wednesday, SK Hynix, a South Korean tech giant, saw its stock price rise by more than 10%, continuing a climb that has helped its shares to triple in value since this year started. SK Hynix counts Nvidia among its top semiconductor clients.
Earlier on Tuesday, Micron, a U.S. memory chip manufacturer, also saw its share price appreciate by more than 20%. This came after UBS, an investment bank, tripled its share price target for Micron. Investors responded by rushing to acquire more shares of this firm, pushing its share price markedly upwards.
Both firms now join an exclusive club of publicly listed businesses with a market valuation in excess of a trillion dollars. This elite club includes tech giants like Meta, Nvidia, Alphabet, Apple and Amazon.
The global demand for AI chips has spiked massively amid supply concerns, and the companies making these semiconductors have enjoyed appreciating sales prices. Revenues have soared and helped to drive up the prices of their shares. It is this wave that Micron and SK Hynix have ridden to reach this historic market valuation.
Earlier this month, Samsung Electronics, another South Korean tech company best known for making televisions and smartphones, saw its market valuation cross the trillion-dollar mark. The firm also makes semiconductors, and these helped it notch stellar sales numbers that investors noticed and drove its share prices higher.
When Samsung joined the trillion dollar club, it became the second Asian company to ever reach that market cap. Taiwanese company TSMC was then the only company in Asia to have reached that milestone. Samsung also makes semiconductors, and Nvidia is one of its customers.
It is noteworthy that Nvidia comes up as a major customer of these semiconductor makers whose valuations are skyrocketing. Nvidia has undoubtedly been the biggest beneficiary of the AI boom, and its market valuation now stands at more than $5 trillion. It was the first company ever to cross that mark and other tech giants like Apple and Microsoft have only recently crossed the $4 trillion market cap milestone.
Many companies are benefiting from this AI boom, and other tech giants like Broadcom Inc. (NASDAQ: AVGO) are also recording solid revenues and rising stock valuations.
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