Shares of semiconductor companies closed out their best year in more than a decade, led by rallies in the chipmakers that are seen as the most immediate beneficiaries of artificial intelligence.
The Philadelphia Stock Exchange Semiconductor Index rose 65 percent this year, with 2023 representing the biggest one-year gain for the index since 2009, when it rose 70 percent in the aftermath of the financial-crisis market bottom. The index fell 0.8 percent on Friday, but recently traded near record levels.
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All but one of the stocks in the 30-member index rose in 2023, but among the gainers there was one standout: Nvidia Corp., which saw explosive sales growth amid demand for the chips used to power AI computations.
Shares more than tripled, resulting in Nvidia earning the title of the first chipmaker with a market capitalization above $1 trillion.
In second place among index components was Advanced Micro Devices Inc, another major player within AI. The stock has climbed nearly 130 percent this year.
The outlier among chipmakers was Wolfspeed Inc., which dropped 37 percent over the course of the year.
The company, which makes power modules used in electric vehicles, delivered a pair of disappointing forecasts in 2023 as it struggles with production problems at a new plant.
Outside of the industry benchmark index, chip designer ARM Holdings went public in September. While early trading was rocky, it has been a strong performer of late, up almost 60 percent since an October low.
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