Market attention is focused on Micron Technology (NASDAQ: MU)'s earnings report next Wednesday.
This week, semiconductor stocks once again took center stage in global equity markets.
Factors such as the easing of geopolitical tensions, a resurgence of capital into risk assets, and AI-related demand continuing to exceed expectations have led to upward revisions in guidance from numerous chip and memory companies. This has triggered massive capital flows into US stocks and markets like Japan and South Korea.
US Equity Funds Attract Record Inflows
A Bank of America strategy team, citing EPFR data, reported that US equity funds saw a net inflow of $119.2 billion in the week ending June 17, setting a new historical record.
Mid-cap US equity funds saw a weekly net inflow of $19.9 billion, also a record high, while small-cap funds attracted $12.3 billion, the second-highest weekly inflow on record. The technology sector was the core focus, with a net weekly inflow of $19.2 billion, marking a historic peak.
Alongside this flood of capital into US markets, major technology firms are engaging in substantial equity financing. Large-scale bond issuances are also underway to fund significant AI-related capital expenditures.
A recent global fund manager survey from Bank of America indicated that being long semiconductor stocks is the most crowded bullish position across all risk assets, with 80% of respondents identifying it as the strongest consensus trade. Despite recognizing several risk warning signals, institutions are reluctant to reduce their chip holdings.
As the artificial intelligence industry continues to expand, memory chip manufacturers like Micron Technology have been major beneficiaries, with their stock prices soaring. Year-to-date gains for several major memory and storage players have been extraordinary, with some exceeding 800%. Western Digital (NASDAQ: WDC) has seen its stock rise over 333% this year, driven by insatiable demand for high-capacity HAMR hard drives, with manufacturer orders locked in until 2027 due to AI training data needs.
Many Wall Street institutions believe that ongoing increases in AI capital spending by large tech companies will provide long-term benefits to memory manufacturers. The market is keenly awaiting Micron Technology's fiscal Q3 2026 earnings report next Wednesday, June 24. In its previous earnings call, the company indicated that demand growth far outpaces capacity expansion, suggesting tight supply conditions may persist through 2027.
Japanese and Korean Markets Reach Milestones
The Nikkei 225 index rose 7.92% this week, closing at 71,250.06 points, surpassing the 70,000 milestone and recording its largest weekly gain in nearly two years.
The AI and semiconductor ecosystem led the gains. Major chip stocks and semiconductor equipment companies posted significant weekly increases, buoyed by positive sentiment from the US semiconductor rally and robust global wafer fab expansion.
Within AI optical communication and computing hardware, leading suppliers saw explosive moves. One company surged over 15% after raising its full-year net profit guidance by nearly 50%, citing strong orders for AI data center optical modules and cooling components as a core supplier for NVIDIA's overseas compute clusters. Another major player rose over 10%, with its fiber optic and high-speed connector capacity reportedly booked for the next 18 months.
The KOSPI index in South Korea surged 11.43% this week, marking its largest weekly advance in over two years. From its 52-week low in June of last year, the index has now rallied over 200%.
Samsung Electronics and SK Hynix, which together constitute over half of the KOSPI's total market capitalization, drove the rally. Samsung's stock rose 21% this week, with its market cap surpassing $1 trillion, bringing its year-to-date gain to 202%. SK Hynix jumped over 32% this week, continually hitting record highs, with a year-to-date increase exceeding 312%. Reports indicate early sampling of next-generation HBM memory to key clients like NVIDIA and Google, with the supply-demand gap for high-end computing memory continuing to widen.
Notably, industry tracker Counterpoint Research released data on Friday forecasting that the global memory chip market size is expected to reach $975 billion by 2026, driven by growing AI infrastructure investment. This represents an increase of approximately 3.2 times from last year.
This rapid growth is primarily attributed to a surge in demand for server memory products, including DRAM and NAND flash, as technology companies, particularly in North America, ramp up investment in AI infrastructure. Server memory products are projected to account for 56% of total memory revenue this year, a significant increase from 37% in 2025 and marking the first time this share has exceeded half. Counterpoint stated that this structural shift toward server memory has become a key growth driver for the memory market. Strong server memory demand is exacerbating supply-demand imbalances, pushing memory prices higher, a trend expected to persist into the first half of next year.
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