Semiconductor shares rallied on Tuesday. Super Micro rose7.3%; Arm Holdings rose 3.8%; Broadcom, Direxion Daily Semiconductors Bull 3x Shares continued to gain 2%; Nvidia rose 0.7%.
Super Micro Computer shares did better than the market. The server maker, that has delayed filing its accounts after its previous auditor resigned, has the opportunity to outpace broader trends a while longer during the quiet holiday period.
That's a period of relative calm for Super Micro after a year of big gains and losses--the stock has traded between $18 and $119 since Jan. 1. The exchange has given the company until the end of February to file its earnings, removing the immediate threat of being delisted for failing to comply with the usual deadlines for publicly traded companies.
For investors, the key question is whether management will be able to reassure when it does publish its earnings. The potential upside could be huge--the stock was one of many caught up in the frenzy around artificial intelligence before the accounting issues surfaced.
Shares of Broadcom added another 2% in premarket trading after soaring 5% on Monday. UBS analysts lifted their AI revenue estimates for the company in fiscal 2026 and 2027 by 20% and 40%, respectively. The analysts maintained a “buy” rating for the stock and raised their price target to $270 from $220, implying a 16% premium from Monday's closing price of $232.35.
UBS is not the only firm bullish on Broadcom, with all of the 14 analysts polled by Visible Alpha holding a "buy" or equivalent rating for the stock. However, their average price target is a bit lower at $249, suggesting 7% upside. Broadcom shares have already more than doubled in value this year.
Nvidia stock was edging up Tuesday as it looks to sustain recent momentum amid a rally in chip stocks. Investors could be positioning ahead of a major speech from CEO Jensen Huang in early January.
The company and the chip sector more generally look to be enjoying the benefits of a “Santa Claus” rally as investors pile on further bets that investment in artificial intelligence will drive demand in 2025.
Investors may be anticipating more reveals related to its AI chip lineup. Nvidia’s Huang is set to deliver a keynote speech at the CES tech show in Las Vegas on Jan. 6, with the potential for more details to be disclosed about its next-generation “Rubin” chip.