On August 1, 2026, the US stock market experienced a frenzy led by semiconductor stocks. The Philadelphia Semiconductor Index (SOX) surged by 2.8% during trading, setting a new historical high. AI chip leaders such as NVIDIA, AMD, and Broadcom rose collectively, driving the Nasdaq Composite Index up by 1.4%, with the S&P 500 also reaching an intraday high. Market sentiment heated up again, fueled by the continuous demand for AI computing power, as capital rapidly flowed into the technology sector.
Historical Breakthrough of the Philadelphia Semiconductor Index: AI is No Longer a Slogan, But Real Money
As of 2:30 PM Eastern Time, the Philadelphia Semiconductor Index stood at 5,823.46 points, up approximately 2.8% from the previous trading day, marking a cumulative gain of 42% since the beginning of the year. This milestone breakthrough is a result of the accelerated global arms race in AI infrastructure. Recent earnings reports and guidance from several semiconductor giants far exceeded market expectations, continuously raising AI-related revenue forecasts and instilling strong confidence in investors regarding the sustainability of the industry cycle.
NVIDIA Creates Another Myth: AI Revenue Doubles Year-on-Year
As the undisputed king of the AI chip market, NVIDIA's preliminary results for the second fiscal quarter of 2026 showed that its data center AI chip revenue doubled year-on-year, reaching approximately $48.6 billion, which was $2 billion higher than the company's previous upper guidance. Driven by this, NVIDIA's stock rose by 5.2% today, with its market capitalization approaching $6 trillion, making it the first company in US stock market history to achieve this milestone. Furthermore, CEO Jensen Huang stated in a public letter that global enterprises are moving from "AI pilots" to "large-scale AI deployment," with order backlogs for the next-generation Blackwell Ultra architecture chips extending beyond 2027.
AMD and Broadcom Follow Suit, Industry Boom Spreads
Besides NVIDIA, AMD rose by 4.8% today as its MI400 series AI accelerators received rush orders from several major cloud service providers. The company confirmed in an investor conference call that its AI-related revenue target for 2026 had been raised from $15 billion to $18 billion. Broadcom rose by 3.6%, benefiting from the explosive growth in demand for custom AI chips (ASICs). Management revealed that its joint development projects with the top three cloud vendors exceeded $30 billion. Additionally, TSMC ADR rose by 2.2% because the production of all AI chips relies on its advanced process capacity.
Market Capital Flows: Institutions Scramble, Retail Investors Follow
In terms of capital flows, the most significant feature of the US stock market on August 1 was the concentrated institutional buying of the semiconductor sector. According to Virtu Financial, the semiconductor industry recorded a net inflow of $5.2 billion as of that afternoon, the highest single-day inflow in nearly three months. Concurrently, retail investors also heavily bought call options in the options market, leading to the market nickname "AI call frenzy."
NVIDIA call option volume increased by 180% compared to the daily average
SMH ETF's daily allocation is near its limit
Multiple semiconductor small-cap stocks like Amkor and Coherent rose in tandem, showing capital overflow effects
Analysts point out that this scenario of both institutional and retail bulls often appears at the beginning of a robust industry trend. However, some hedge funds have begun using protective put options for hedging, concerned about volatility from short-term overvaluation.
Valuation Debate Heats Up: Has the Semiconductor Sector Overpriced the Future?
Despite encouraging fundamentals, the debate over the high valuation of the semiconductor sector in Wall Street has never ceased. The forward P/E ratio of the Philadelphia Semiconductor Index currently stands at 28 times, significantly higher than its five-year average of 18 times. David Kostin, a Goldman Sachs strategist, noted in today's research report: "The certainty of AI chip demand supports the valuation premium, but investors must remain vigilant about the risk of a pullback after 'perfect pricing.'"
However, the bullish camp remains firm. An analyst at Morgan Stanley calculated in a recent report that the global AI chip market size will exceed $400 billion in 2027, and the current total market capitalization of major companies has not yet fully reflected this potential. They argue that as long as AI computing power demand maintains a quarter-on-quarter growth of over 10%, the current valuation of the semiconductor sector is reasonable.
Technical View: Upward Potential Opens After Breaking New Highs
From a technical analysis perspective, the Philadelphia Semiconductor Index entered a vacuum zone after breaking the previous high of 5,720 points, with almost no historical trapped selling above it. The MACD formed a golden cross, and the Relative Strength Index (RSI) was 72, placing it in a strong range but not yet in extreme overbought territory. Key short-to-medium-term support levels to watch are 5,650 points (a pullback support after breaking the previous high); if the index does not break this support on a pullback, it is expected to challenge the round number of 6,000.
The Nasdaq Composite Index also performed brilliantly. Due to the high proportion of semiconductor-weighted stocks, the index broke the historical high of 18,200 today, with trading volume increasing by 20% compared to the recent average. There is some rotation within the technology sector, with capital shifting from large internet platform stocks to chip hardware stocks, perhaps signaling a market style shift from a "software narrative" to "physical computing power."
Future Focus: AI Earnings Season and Federal Reserve Policy Game
Over the next week, the market will see more technology giants release earnings, including Microsoft, Google, and Meta. Their capital expenditure plans will be a crucial benchmark for verifying the sustainability of AI demand. Furthermore, the Federal Reserve will release the July monetary policy meeting minutes in mid-August, and changes in expectations regarding the timing of the first rate cut will also affect the valuation elasticity of chip stocks. In a low-interest-rate environment, high-growth semiconductor assets typically receive higher valuations, so an increase in the expectation of rate cuts will further boost the sector's upward trajectory.
In summary, August 1, 2026, is destined to be recorded in the history of US stock market technology—the Philadelphia Semiconductor Index setting a new high driven by the dual forces of the AI wave and strong earnings. How far this capital feast, ignited by the computing power revolution, can go, we will continue to track and interpret for investors in every live broadcast. For individual investors, it is necessary both to embrace the trend and to buckle up, seeking true alpha amidst the volatility.
