Chip stocks lead Nasdaq rebound: AI investment theme continues to attract institutional capital

Chip Stocks Lead Nasdaq Rebound: AI Investment Theme Continues to Attract Institutional Capital

Introduction On July 9, 2026, U.S. stocks staged a broad rebound led by strong performance in chip stocks, with the Nasdaq Composite leading gains and the S&P 500 quietly approaching its all-time high. Despite ongoing geopolitical risks, market risk appetite has clearly recovered, with the semiconductor sector and artificial intelligence-related stocks once again becoming the focus of capital flows. Behind this phenomenon lies the continued bet by global institutional investors on the long-term trend of AI, as well as a repricing of changes in the macroeconomic environment.

Market Background On the day, the Nasdaq rose nearly 1.2%, the S&P 500 gained 0.8%, and the Dow Jones Industrial Average added about 0.4%. The S&P 500 closed at 7,539 points, just 0.9% below its record closing high of 7,609 points set on June 2. Notably, the equal-weight S&P 500 outperformed the traditional S&P 500, indicating broad-based participation in the rally.

On the macro data front, U.S. initial jobless claims edged lower last week, signaling a still-robust labor market. Meanwhile, oil prices fell on expectations that the U.S. and Iran would return to negotiations. West Texas Intermediate crude futures dropped 2% to $72.08 per barrel, and Brent crude fell 2.2% to $76.30 per barrel. The decline in oil prices eased concerns about a renewed rise in inflation, providing support for risk assets.

Sector performance showed clear divergence: Energy, consumer staples, and healthcare sectors declined, while technology, communication services, and consumer discretionary sectors led the gains, clearly pointing to a recovery in risk appetite.

Current Capital Flows Capital is notably flowing back into semiconductor and AI-related fields. The Roundhill Magnificent Seven ETF (MAGS) turned positive after dipping during the session, ultimately rising 1.28%. Meta and Tesla contributed the majority of the gains, offsetting the drag from Nvidia and Alphabet. This suggests that capital is rotating within the "Magnificent Seven" rather than exiting entirely.

In chip stocks, news of memory chip company SK Hynix's upcoming U.S. listing boosted the entire sector, with market expectations for memory chip demand turning optimistic. However, there was divergence within the sector—reports indicated that one large-cap chip stock underperformed on the day, reflecting ongoing market concerns about individual companies' fundamentals or valuations.

Meanwhile, Wall Street's enthusiasm for AI-related themes has not cooled. Multiple institutions continue to increase their holdings in AI infrastructure, cloud computing, and data analytics assets. Against the backdrop of rising risk appetite, defensive sectors such as utilities and healthcare experienced capital outflows, as investors rotated positions back into growth assets.### Investment Logic Analysis 1. Structural Support for the Long-term AI Trend: Large tech companies continue to increase capital expenditures for AI infrastructure, driving demand for GPUs, high-bandwidth memory, and network chips. Institutional investors generally believe that AI is in a phase similar to the early internet infrastructure build-out, with significant growth potential over the next 3-5 years.

2. Recovery Expectations for the Semiconductor Cycle: After a cyclical adjustment in global semiconductor sales during 2024-2025, multiple research institutions expect an upward cycle to begin in the second half of 2026. Stabilizing memory chip prices and increased utilization rates of advanced manufacturing processes are important signals.

3. Geopolitical Risks Gradually Priced In: Although tensions between the U.S. and Iran once pushed up oil prices, increased expectations for a diplomatic resolution have led to a decline in energy prices and a narrowing of risk premiums. Additionally, the resilience of the U.S. economy has strengthened investor confidence in a "soft landing," supporting equity valuations.

4. Institutional Accumulation: Pension funds, sovereign wealth funds, and family offices have shown in their Q2 reports that they continue to increase allocations to technology and AI themes. For example, some pension funds have tilted their private equity portions within alternative investment portfolios toward AI-related startups.

Risk Factors - Macro Risk: Although the labor market is robust, whether inflation can continue to fall remains key. If oil prices surge again due to geopolitical events, the Federal Reserve may be forced to maintain higher interest rates for longer, thereby suppressing valuations. - Policy Risk: Uncertainty regarding U.S. export controls on semiconductors to China may affect revenue expectations for some companies. Additionally, the evolution of the AI regulatory framework could change the competitive landscape. - Geopolitical Risk: The U.S.-Iran conflict has the potential to escalate further. If passage through the Strait of Hormuz is obstructed, a disruption in crude oil supply would impact global markets and trigger a sell-off in risk assets. - Market Valuation Risk: The S&P 500's current forward P/E ratio is about 21 times, at a historically high level. The trading premium for AI-related stocks is especially pronounced, and any earnings growth below expectations could lead to a significant correction.### Long-Term Outlook Over the next 3–10 years, the AI and semiconductor industries will remain core directions for global capital allocation. As AI technology transitions from the training phase to the inference and application phase, upstream chip demand may gradually shift toward downstream software and services, leading to a diversification of investment themes. Institutional investors should focus on the following trends: - Continued investment in computing infrastructure: Global data center construction investment is expected to exceed $1 trillion over the next five years, with participation from cloud giants to sovereign wealth funds. - Semiconductor localization: The United States, the European Union, and Japan are all advancing domestic chip manufacturing capabilities, which will provide long-term opportunities for equipment manufacturers and IDMs. - Rise of the AI application layer: Once infrastructure matures, companies with data advantages and industry know-how will generate excess returns; investors need to balance hardware and software positions.

In the short term, the market may continue to experience wide fluctuations, but the foundation for a structural bull market remains. For long-term investors, current market volatility offers opportunities to rebalance portfolios and tilt toward growth themes like AI and semiconductors. Especially when defensive sectors see capital outflows, it is precisely the window to position for long-term growth assets.

In summary, the chip stock-led rebound on July 9, 2026, was no accident but the result of continued global capital recognition of the long-term AI trend. Despite multiple risks, the allocation behavior of institutional investors indicates they believe this theme will dominate global growth asset performance in the coming years.