Nvidia, AMD, Micron Lead Chip Sector Higher in AI, Japan Focus

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(Reuters) – Shares of Nvidia Corp, Advanced Micro Devices and Micron Technology were the biggest boosts to the chip sector on Thursday, outperforming the broader market as investors looked for ways to invest in artificial intelligence and Japan.

Shares of chip design software company Synopsis soared 8.7% after it reported better-than-expected third-quarter profit, saying increased use of AI and automation boosted its business.

Nvidia shares were up 5.0%, while the Philadelphia Semiconductor Index rose 3.2%.

Micron shares climbed 4.1% after it announced plans to invest up to 500 billion yen ($3.70 billion) in extreme ultraviolet (EUV) technology in Japan over the next few years with support from the Japanese government.

Japanese President Fumio Kishida asked executives of companies such as Micron, Intel Corp and Taiwan Semiconductor (TSMC) to invest in Japan ahead of a three-day Group of Seven (G7) summit in Hiroshima, where member countries will discuss how they What do you see? As China's economic draconian policies and accumulation of sensitive technology.

Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh, put Thursday's rally down to continued investor interest in the emergence of artificial intelligence as the hottest new technology, more so than the news from Japan.

Forrest said, “While it is encouraging that companies and countries are working together to increase capacity, for investors when companies are new plants, it is generally not profitable in the short term because that is where is where all the free cash flow goes.”

The money manager, cited Synopsys' results as a positive sign for the chip sector, however, noted that investors view chips as part of the AI ​​story that they can buy today because “no company is what you can buy the linchpin” for AI.

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shares were up 4.0% while Intel added 2.8%. Nvidia, which is up 116% so far in 2023, is due to report quarterly results on May 24.

Nvidia shares rose to their highest since December 2021, while Micron shares touched their highest since June 2022.

(Reporting by Sinead Carew; Editing by Marguerita Choy)