Multiplier

Recession? Rescheduled. The S&P 500 closed at fresh records on Friday and Monday, bringing its 12-month tally of new highs to 40.

The latest push came from Intel ($INTC), which surged 23.6% after crushing earnings on Friday, its best day since 1987. Revenue came in at US$13.6B, EPS at US$0.29 vs US$0.01 expected.

The real story was forward-looking. CEO Lip-Bu Tan suggested the CPU-to-GPU mix could shift from 1:8 toward 1:1 in an agentic AI world – challenging the assumption that GPUs dominate everything.

That idea lit a fire under the entire complex. AMD ($AMD) and Arm ($ARM) moved higher, while the iShares Semiconductor ETF ($SOXX) extended its win streak to 18 sessions. 

The moves were even more extreme further down the stack. Micron ($MU) and Sandisk ($SNDK) are now up 66% and 288% YTD.

The latest catalyst: bullish initiations and aggressive AI-driven forecasts. Analysts see Sandisk reaching US$26B in revenue by FY27, while Micron’s earnings trajectory implies up to US$364M in average daily profit. That’s less a forecast than it is a bet on sustained, infrastructure-scale AI demand. 

And that demand is shifting focus toward efficiency. Enter photonics, tech that uses light to move and store data. Or, as IDX Advisors CIO Ben McMillan puts it, ‘fiber optics on steroids.’

The sector turned a little volatile this week. Poet’s ($POET) CFO revealed on a podcast that his company was supplying components to Marvell ($MRVL) via its Celestial AI division. Marvell used that breach of confidentiality as grounds to cancel all purchase orders, sending Poet's stock down 47% in a single day.

In early-stage waves for emerging tech, narratives outrun fundamentals. Case in point: the WSJ reporting that OpenAI missed its own revenue targets and may not be able to cover computing contracts if its top line misses. 

That weighed on chip stocks, particularly those with big OpenAI exposure: Oracle ($ORCL), AMD,  Broadcom ($AVGO) and Qualcomm ($QCOM) dropped in Tuesday’s session.

Still, the AI multiplier effect is real. Semiconductors now make up 14% of the entire U.S stock market, up from just 4% in 2020. And value stacks up in what Nvidia ($NVDA) describes as the ‘five-layer cake.’

Each layer arrives on its own timeline. And each wave creates both winners and crowded trades. The multiplier effect for portfolios involves finding the next constraint before the crowd does.

This is not financial advice nor a recommendation to invest in the securities listed. The information presented is for general information purposes only and intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. The author of this article and other employees of Stakeshop Pty Ltd may hold positions or have financial interests in the company (or companies) discussed above. As always, do your own research and consider seeking financial, legal and taxation advice before investing.