Shares in chipmakers surged in the first half of 2026 as investors piled into companies making the hardware behind the AI boom, while the costs of that frenzy were pushed onto consumers and workers through higher prices, bigger borrowing, and more capital-intensive business plans. Semiconductor and memory chip manufacturers saw their profits soar during 2026, and some large software companies fell out of favour as money chased the firms closest to the datacentre hardware pile-up.
Hardware First, People Last
The share price of some chip companies has tripled or more since the start of January, driving Asia Pacific stock markets sharply higher. South Korea's Kospi index is up 123% this year, its strongest first half since at least 1990, according to Guardian analysis of data from the London Stock Exchange Group. Samsung's share price has jumped 169% so far this year, and SK Hynix has risen 303% since the start of January. That’s the market’s version of a victory parade: a handful of firms, a flood of speculative capital, and everyone else left to absorb the consequences.
Both companies reported a big increase in demand this year as AI companies competed for chips to power their datacentres. On Monday, the president, Lee Jae Myung, pledged to cement South Korea's leadership in the industry with investments worth more than $576bn (£435m) over several years covering semiconductors, AI datacentres and robotics. Under the plan, Samsung and SK Hynix will build a total of four fabrication plants in the country's south-west region. The state, as ever, arrives with a cheque book for corporate expansion and a speech about national leadership.
US chipmakers have also been in strong demand. Shares in Sandisk are up 780% in 2026 and have rocketed by 4,510% over the last 12 months. Western Digital has gained 240% this year, Micron is up 296% and Seagate has risen 226%, with two trading days left until the second half of the year begins. The numbers are absurd enough to sound satirical, but they’re just the market doing what it does best: rewarding scarcity, speculation and concentration.
The Price of the Boom
Dan Coatsworth, the head of markets at the investment platform AJ Bell, said the four US companies had produced the "kind of gains in six months you might normally expect over decades with investing". He added: "Demand exceeding constrained supply led to a surge in memory chip prices and took suppliers' shares on a spectacular ride upwards. Higher selling prices and greater demand is a powerful cocktail for explosive earnings growth." That’s the language of extraction without the blush. Constrained supply, higher prices, explosive earnings growth. The people paying more for devices don’t get a vote in any of it.
Apple blamed the rise in the cost of memory chips for an increase in its iPad and MacBook prices last week. The company is also reportedly asking the Trump administration for clearance to buy memory chips from CXMT, a Chinese company that the Pentagon has blacklisted. So the consumer gets the bill, the corporation seeks permission from the state, and the Pentagon’s blacklist sits there like a reminder that even global supply chains still answer to military power.
Shares in the hyperscalers, which are rolling out AI services, have fallen in recent weeks as investors shifted their holdings out of software and into hardware stocks. That includes Microsoft, which is down 24% during 2026 and hit a one-year low last week. The market’s faith is fickle. It loves the hardware until it doesn’t.
Some investors have balked at the huge spending plans announced by leading AI companies. This has led to higher borrowing and will eat up the firms' cashflow, making them more capital-intensive businesses. There’s the old trick again: private expansion dressed up as innovation, then financed through debt and passed off as inevitability.
Markets, War, and State Power
There have been signs in recent days that the chip stock boom is faltering, with shares off their recent highs as investors rotated out of tech into other sectors. Chris Beauchamp, the chief market analyst at the trading and investment platform IG, said: "Having piled in to AI and tech since the end of March, there is a desire to protect profits, and investors continue to be in a mood to sell first and ask questions later." The casino always has an exit door for those with enough money to reach it.
Generally, there have been solid stock market gains over the first half of 2026, with Japan's Nikkei climbing 38%. The UK's FTSE 100 has gained 5.8%, having fallen back from a record high at the end of February as the Iran war hit share prices. The London stock market was lifted by takeover offers for several companies, with Beazley, DCC, Glencore, Schroders, Segro and Intertek receiving approaches from suitors. War shakes the markets, then the markets recover, then the takeover offers arrive. The cycle is brisk, efficient, and utterly indifferent to anyone outside the boardrooms.
Brent crude oil began the year at $60 a barrel and is ending June about $12 higher. However, at the end of April its price had doubled, to more than $120, as the closure of the strait of Hormuz fuelled supply shortages. The price swings tell their own story: strategic chokepoints, military tension, and ordinary people left to pay more for energy while traders call it volatility.
The US S&P 500 share index has gained 7.4% so far this year, to 7,354 points at the end of last week. Mark Haefele, the chief investment officer at UBS Global Wealth Management, predicts the US market will climb over the next year, lifting the S&P 500 to 8,200 points by June 2027. He said: "Our base case sees continued strength in AI capital expenditure, a resilient US economy, ongoing fiscal spending around the world, and strong credit creation continuing to support corporate earnings growth and markets more broadly." That’s the whole machine in one sentence: public spending, private profit, credit expansion, and a promise that the earnings line will keep rising while the costs are socialised and the gains are hoarded.