Monolithic Power Systems and Amkor Stocks Trade Up, What You Need To Know

A number of stocks jumped in the afternoon session after a cooler-than-expected June inflation report and a surprise capital expenditure warning from IBM appeared to validate AI hardware demand.

What Happened? A number of

stocks jumped in the afternoon session after a cooler-than-expected June inflation report and a surprise capital expenditure warning from IBM appeared to validate AI hardware demand. June core CPI printed flat month-over-month (2.6% year-over-year versus a 2.9% forecast), reopening the door to a friendlier interest rate environment. Also, IBM CEO Arvind Krishna revealed in a letter that IBM's second-quarter revenue missed expectations because clients abruptly shifted their enterprise budgets toward servers, storage, and memory to secure supply-constrained AI infrastructure ahead of expected price hikes.

The combination of a macro tailwind and a fundamental read-through provided a strong setup for chip stocks. The soft inflation print lowers the discount rate, which benefits high-multiple semiconductor valuations. More importantly, IBM's warning acts as direct confirmation that AI infrastructure spending is not slowing down.

Instead, it suggests that hardware purchases are actively crowding out enterprise software budgets. The specific mention of "memory" purchases by IBM's CEO likely explains the outsized reaction in Micron and SanDisk. While geopolitical risks remain elevated following renewed U.S.-Iran conflict, the market appears to be treating the IBM commentary as a strong fundamental signal ahead of Taiwan Semiconductor Manufacturing Company's (TSMC) earnings later in the week.

Adding to the optimism, several companies announced significant capital investments to expand manufacturing capacity for advanced chips. Driven by the explosive growth in artificial intelligence and high-performance computing, chipmakers are scaling up their operations. Intel announced a €5 billion ($5.7 billion) investment in its Ireland facility to boost production of its Xeon 6 processors.

Similarly, Tower Semiconductor is expanding its 300mm manufacturing capabilities in Japan with government support to meet long-term customer demand. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Among others, the following stocks were impacted: - Analog Semiconductors company Monolithic Power Systems(NASDAQ:MPWR) jumped 7.1%.Is now the time to buy Monolithic Power Systems?

Access our full analysis report here, it's free. - Semiconductor Manufacturing company Amkor(NASDAQ:AMKR) jumped 5.1%.Is now the time to buy Amkor? Access our full analysis report here, it's free.