New York, May 8, 2026, 16:06 EDT
- Semiconductor stocks took off Friday, sending the Philadelphia Semiconductor Index up nearly 5% and fueling the latest AI rally.
- ETFs tracking chips in the U.S., Taiwan, and South Korea pushed higher, with investors rotating out of individual names.
- Eaton’s numbers now reflect a surge in demand for data-center power gear. Still, margins and forward guidance are tempering the narrative.
Semiconductor stocks took off Friday, driving up AI-focused ETFs and putting fresh records on the boards for both the S&P 500 and the Nasdaq. Nvidia tacked on gains, while Micron and Sandisk each vaulted roughly 12%. The Philadelphia Semiconductor Index logged an almost 5% leap, according to Reuters.
This shift is significant, as the AI trade keeps expanding. Investors aren’t sticking to chip designers—they’re moving into ETFs (those baskets of stocks that act like one share) and snapping up companies supplying power gear for data centers. SMH climbed roughly 4.7% late in New York, SOXX advanced around 5.4%, EWT added 1.8%, and EWY jumped 7.4%. Eaton edged up about 0.8%, according to market data.
Chip stocks have bounced back after a rocky few months. According to a Motley Fool piece picked up by Yahoo, the VanEck Semiconductor ETF (SMH) dropped 13% from late January through March’s close, then jumped as buyers piled back into AI-related hardware names.
ETF numbers tell the story. VanEck’s SMH boasted a 49.96% NAV return for the year through May 7, assets piling up to $60.99 billion, carrying a 0.35% expense ratio. BlackRock’s SOXX posted a 63.68% return on NAV, while EWT climbed 48.43% and EWY surged 85.22% for the same period. SOXX comes in at 0.34% for expenses, while EWT and EWY each charge 0.59%.
SMH, among U.S.-listed semiconductor plays, stands out for its concentration. Nvidia made up 16.91% of SMH, with Taiwan Semiconductor Manufacturing Co. at 10.30% as of May 7, according to VanEck data. SOXX holds 30 names, tracking a U.S.-listed semiconductor index. EWT and EWY, meanwhile, focus on Taiwan and South Korea—key players in advanced chips and memory.
Asia isn’t playing second fiddle here. Reuters said on Thursday that the region’s three most valuable firms—TSMC, Samsung Electronics, and SK Hynix—are all chip giants, and their all-time high profits have thrust them into the spotlight of the global AI supply chain. “It’s a seller’s market for AI suppliers,” Fubon Financial Holding fund chairman Alex Huang told Reuters. Reuters
Eaton sits right at the intersection of semis and the grid. First-quarter sales climbed 17% to $7.5 billion, with adjusted earnings landing at $2.81 per share. The company lifted its 2026 organic growth forecast to a range of 9% to 11%. “Strong demand across our markets” powered the quarter, CEO Paulo Ruiz said. Eaton also wrapped up $11 billion worth of acquisitions, snapping up Boyd Thermal and Ultra PCS. Eaton
The stock stumbled earlier this week, a signal that investors are after solid results, not just every mention of AI. According to a Motley Fool piece picked up by MSN, Eaton shares dropped as much as 8.1% Tuesday, reversing some of that slide as the session wore on. The dip followed a strong quarter, but modest tweaks to guidance drew scrutiny. Segment margins, while ahead of what Eaton had projected, still landed 120 basis points below last year’s level.
There’s no mistaking the demand. Eaton’s Electrical Americas segment saw data-center orders surge roughly 240% in the first quarter, with data-center revenue up about 50% year over year, according to company presentation materials. Eaton also pointed to its Boyd Thermal liquid-cooling agreement and a power platform collaboration with Nvidia, moves that further connect the industrial supplier to the AI factory construction push.
Risks loom, and they’re no footnote. Concentration has fueled ETF gains, but that same dynamic can unwind fast—especially if capital spending dries up, AI companies face tighter funding, or memory prices falter. “The Asian chip rally was getting dangerous,” Nick Ferres, CIO at Vantage Point Asset Management, told Reuters. Eaton’s slip made it clear: even companies beating forecasts aren’t safe if margins disappoint. Reuters
Right now, buyers aren’t backing off. Rob Williams, chief investment strategist at Sage Advisory Services, told Reuters the U.S. economy appears “hard to wreck.” Fresh LSEG figures, also cited by Reuters, put first-quarter S&P 500 earnings on pace for a nearly 29% jump—AI-driven giants doing much of the heavy lifting. That momentum, at least for this week, keeps chip ETFs and AI infrastructure stocks leading the pack. Reuters
