Shares in chipmakers surged in the first half of 2026 as investors piled into companies making the hardware behind the AI boom, but the rally's come with a cost for ordinary consumers. Apple blamed the rise in memory chip prices for iPad and MacBook price increases last week, a reminder that supply constraints and investor euphoria don't always translate into affordability for working families.
Semiconductor and memory chip manufacturers saw their profits soar during 2026, while some large software companies fell out of favour. 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.
The Hardware Winners
Both Samsung and SK Hynix 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.
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.
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."
The Software Losers
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.
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 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."
Broader Market Gains
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.
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 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."
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.
Why This Matters:
The AI boom has enriched investors and chip manufacturers, but it's also driving up costs for consumers and raising questions about who benefits from technological progress. Apple's admission last week that memory chip prices forced it to raise iPad and MacBook prices shows how supply constraints can hit household budgets—especially for families relying on affordable tech for education and work. The shift from software to hardware stocks reflects investor confidence in physical production over digital services, but it also highlights the capital-intensive nature of AI development. As governments pour hundreds of billions into semiconductor plants, the question remains: will this industrial policy create good jobs and affordable products, or just windfall profits for shareholders? Europe's own chip strategy must learn from this moment—public investment should come with public accountability, fair wages, and a commitment to keeping technology accessible for all.