Tech stocks soar as SK hynix adds to rising AI confidence

Technology stocks experienced a significant rise across Asia on Wednesday, driven by impressive earnings from chip manufacturer SK hynix, which fueled confidence in the AI sector ahead of Wall Street giants Microsoft and Alphabet's results. Oil prices also saw an increase as investors monitored Israel's election results, which could influence Prime Minister Benjamin Netanyahu's ongoing conflict with Iran.

After a brief setback in the tech market due to concerns over excessive investment spending and profitability, AI-linked firms regained momentum. SK hynix reported a staggering 632% increase in third-quarter operating profit to $62.8 billion, reflecting record revenue and profits for six consecutive quarters. Analyst Stephen Innes highlighted that SK hynix demonstrated that companies investing heavily in AI are reaping the rewards.

The AI sector benefited further from Anthropic's IPO filing, which revealed a surge in revenue by approximately 1,300% and heavy capital spending plans. Other tech companies, such as Broadcom, Citi, Blackstone, and Morgan Stanley, also announced a $63 billion financing structure to support Anthropic's expansion. Consequently, SK hynix's shares surged nearly 9%, while South Korean rival Samsung increased by more than 8%, pushing the Kospi index over 6%.

Japan's Nikkei 225 climbed over 1%, with Kioxia soaring more than 10%, Advantest gaining 3%, and Tokyo Electron rising 4%. Taipei's chipmaker TSMC also performed strongly, while Hong Kong, Shanghai, Sydney, Singapore, and Wellington experienced positive gains. The market's rally mirrored gains in New York, where the Nasdaq added over 1%.

Traders eagerly awaited Microsoft and Alphabet's earnings reports later in the day, as well as Amazon, Apple, and Intel's results on Thursday. However, traders were also anticipating the Federal Reserve's policy decision, which was expected to hold interest rates steady but could signal a potential rate hike in December. Meanwhile, crude prices jumped over 1% following Israel's general election results, with Netanyahu asserting his intention to form a new coalition and potentially collaborate with US President Donald Trump to counter Iran's perceived "existential threat."