AMD and Micron surge, Lam Research climbs 17% as chip stocks rip higher

Chip stocks rocketed on Thursday after strong tech earnings from Microsoft and Lam Research sparked a widespread rally, fueling double-digit gains for hard-hit semiconductor companies.

Lam Research shares popped 17% and headed for their best day since 1999. The company posted strong earnings and guidance on artificial intelligence-driven demand. Microsoft popped 15% after signaling strong growth in its Azure business and lifting capital expenditures on robust demand. Shares headed for their best day since 2008.

Memory stocks also surged as Samsung warned the memory crunch could last into 2028. Micron and Sandisk rallied 17% and 23%, respectively. The stocks sold off in recent sessions on underwhelming results from South Korea's SK Hynix .

Chip stocks have been one of the largest beneficiaries of the AI boom as companies invest in memory and central processing units to fuel the infrastructure buildout.