Chipmakers extended their rally on Tuesday, pushing the Philadelphia Semiconductor Index toward its longest winning streak in nearly eight years. The benchmark has climbed 8.7% over the past nine sessions and is now up 22% in 2025, outpacing the Nasdaq 100’s nearly 16% advance.
Gains were driven by heavyweights including ON Semiconductor (NASDAQ:ON), Intel (NASDAQ:INTC), Nvidia (NASDAQ:NVDA), and Broadcom (NASDAQ:AVGO), Bloomberg reported on Tuesday.
Nvidia shares have surged more than 32% this year, supported by strong demand for data center chips and memory products. The company continues to benefit from Big Tech’s aggressive investment in AI, which has driven orders for its accelerators.
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ON Semiconductor has also drawn investor attention. Needham analyst Quinn Bolton noted that the company’s industrial segment showed early signs of recovery, with improving bookings in aerospace, defense, and medical markets. Although ON faces margin pressure from competitive pricing and under-absorption, the company has cut capacity by 12% and reduced its workforce by 9% to improve profitability when demand rebounds.
Intel shares have gained more than 24% in 2025 following reports that the Trump administration acquired a 10% equity stake through the CHIPS Act. While Intel had initially resisted the plan, investors interpreted the move as a vote of confidence. The company also sold a $3.3 billion stake in Altera to Silver Lake and initiated a restructuring under CEO Lip-Bu Tan, which includes job cuts and the establishment of a new foundry board.
Broadcom has been one of the strongest performers, with shares up 55% year-to-date. The stock advanced on reports of its partnership with OpenAI and better-than-expected quarterly results. The company confirmed a $10 billion order from OpenAI for custom AI chips, helping to alleviate processor shortages and lifting its fiscal 2026 AI revenue growth forecast to 50%–60%.
Broadcom’s AI semiconductor revenue rose to $5.2 billion last quarter and is projected to reach $6.2 billion in the fourth quarter, driving a 22% year-over-year jump in overall revenue to nearly $16 billion. Major deals with Oracle (NYSE:ORCL) and Alphabet’s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google, along with CEO Hock Tan’s pledge to remain through 2030, further bolstered sentiment.
The rally highlights how AI infrastructure remains the dominant theme in 2025. Bloomberg data shows Nvidia, Broadcom, Taiwan Semiconductor Manufacturing Company (NYSE:TSM), and Micron (NASDAQ:MU) together accounted for nearly 70% of the index’s gains this year.
Analysts attribute the sector’s strength to surging AI-driven demand, citing Oracle’s strong earnings and Microsoft’s (NASDAQ:MSFT) AI infrastructure deal with Nebius as evidence of long-term growth.
With companies securing chip supply in advance to support AI workloads, analysts argue the rally could be sustainable, even if valuations appear stretched in the near term. Nvidia and Taiwan Semiconductor remain key drivers of the gains, underscoring the sector’s central role in powering the next phase of technological expansion.
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