Investor enthusiasm for artificial intelligence continues to pour into the companies that make and test the chips behind it, with semiconductor names broadly outpacing the wider market in 2026.
According to The Motley Fool, the iShares Semiconductor ETF is "obliterating" the S&P 500 this year. AMD has been a standout: Yahoo Finance reports the stock is up 149% year to date, raising the question of whether the rally is "getting dangerously crowded" or still has room to run. S&P Global says AMD's next-generation AI chips are positioned to power data center growth in 2026.
The demand is rippling beyond the marquee chipmakers. FormFactor drew a cluster of analyst upgrades tied to AI and high-bandwidth memory testing, though the Yahoo Finance item cautions the stock could be 47.3% overvalued after the run-up. Moomoo reports capital flowing into printed circuit board makers — described as the "foundation of AI semiconductors" — with some share prices up 2.5x in a single month. TradingView notes that AI-driven semiconductor sales are also lifting related mutual funds.
The field is getting more crowded on the supply side, too. Simply Wall St reports that Amazon wants to sell its in-house Trainium AI chips to customers beyond its own AWS cloud, a move that would put it in more direct competition with established chipmakers.
A key test is coming. According to Analytics Insight, Wall Street is awaiting Micron Technology's quarterly earnings for fresh evidence on semiconductor demand, with the report seen as a gauge of whether the AI rally can sustain momentum as the S&P 500 nears record highs.
Why it matters: semiconductors have become the clearest financial barometer of the AI boom, and whether these stretched valuations hold may signal how much further the broader market rally can go.