Shares of Advanced Micro Devices (NASDAQ: AMD), Nvidia (NASDAQ: NVDA), and other semiconductor giants soared on Monday after reports emerged suggesting that the Trump administration may spare the industry from the upcoming tariffs set to take effect on April 2. The relief sent chip stocks flying — but don’t get too comfortable.
AMD shares shot up nearly 7%, emerging as one of the top performers in the S&P 500, while Nvidia gained 3%. NXP Semiconductors (NASDAQ: NXPI) jumped 5%, and Micron Technology (NASDAQ: MU) and Qualcomm (NASDAQ: QCOM) also saw their shares rise, collectively driving a 3% boost in the PHLX Semiconductor Sector Index (SOX).
This surge follows a Wall Street Journal report over the weekend revealing that tariffs targeting specific sectors — including automobiles, pharmaceuticals, and semiconductors — are unlikely to be announced on April 2. However, the specter of reciprocal taxes on certain nations still looms, keeping uncertainty high.
A Sector in Flux
While the immediate news may bring some short-term relief, don’t be fooled. The semiconductor sector has had a rough start to 2025, and the threat of tariffs continues to cast a long shadow. The possibility of tariffs up to 25%, as previously suggested by President Trump, has kept investors on edge in recent weeks. The PHLX Semiconductor Sector Index is down 5% year-to-date, underscoring the sector’s uneasy position.
And it’s not just tariffs. The global chip market faces additional pressure from potential export curbs and supply chain disruptions, which could hurt sales. Meanwhile, the rise of a cheaper, AI-focused chip from Chinese startup DeepSeek has raised eyebrows over how much Big Tech will continue to invest in AI infrastructure going forward.
Big Tech Steps Up: Is the AI Investment Worry Overblown?
Despite concerns that AI spending could cool, recent announcements from major U.S. tech firms suggest the opposite. Amazon (NASDAQ: AMZN) recently unveiled plans to spend over $100 billion in capital expenditures for 2025, signaling a major commitment to growing its AI infrastructure. Following suit, Alphabet (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), and Meta Platforms (NASDAQ: META) all pledged substantial investments in AI development.
With these moves, the narrative around reduced investment in AI may be shifting, offering some hope for semiconductor companies dependent on the tech sector’s appetite for chips.
