Semiconductor stocks experienced their best session since February on Wednesday, buoyed by strong quarterly earnings and less concerning developments regarding chip exports to China.
The iShares Semiconductor ETF SOXX and the VanEck Semiconductor ETF SMH surged by 5.0% and 6.1%, respectively, by 12:30 p.m. ET, marking their most substantial gains since Feb. 22, 2024.
Biden Administration Rethinks Chip Curbs
Reuters reported this morning that the Biden administration is set to introduce a new regulation next month, which will extend U.S. authority to restrict the export of semiconductor manufacturing equipment from certain foreign countries to Chinese chipmakers.
Nevertheless, shipments from key allies such as Japan, the Netherlands, and South Korea, which also export essential chipmaking equipment, will be exempted from this rule, thereby mitigating its impact, according to sources.
Two weeks ago, news of potential new export restrictions to China caused the U.S.-listed shares of Dutch chipmaker giant AMSL Holding N.V. ASML to plummet by over 12% in one day.
However, on Wednesday, AMSL shares rose more than 7% following news of their exemption from the export curbs. Tokyo Electron Ltd. TOELY, which would have also been heavily affected by the potential new restrictions, saw a 7.4% rally on Wednesday.
Positive Results for AMD
Shares of Advanced Micro Devices Inc. AMD surged over 5%, poised for their best session since late February, after reporting stronger-than-expected results for the last quarter.
The Santa Clara, California-based chipmaker posted revenue of $5.84 billion, a 9% increase compared to the same quarter in 2023, surpassing estimates of $5.73 billion. Non-GAAP earnings per share were 69 cents, exceeding expectations of 67 cents and representing nearly a 19% rise from Q2 2024.
"We achieved robust revenue and earnings growth in the second quarter, driven by record Data Center segment revenue," stated AMD Chair and CEO Dr. Lisa Su.
"Our AI business continued to gain momentum, positioning us to deliver strong revenue growth in the second half of the year, led by demand for our Instinct, EPYC, and Ryzen processors. The rapid advancements in generative AI are fueling increased demand for computing power across all markets, creating significant growth opportunities as we provide leading AI solutions across our business."
Wednesday’s Top Chipmaker Performers
The top-performing chipmaker stocks on Wednesday were:
| Security Name | 1-day Return (%) |
| NVIDIA Corporation | 11.84% |
| Broadcom Inc. AVGO | 10.09 |
| United Microelectronics Corporation UMC | 8.95 |
| Micron Technology, Inc. MU | 7.59 |
| Monolithic Power Systems, Inc. MPWR | 7.42 |
| ASML Holding N.V. | 7.06 |
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