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Dell's AI guidance raises prominent chip stocks

Dell Technologies (DELL) shares are catapulted higher ahead of Friday's session close, seeing upward gains of 30%. Dell outpaced fourth-quarter earnings estimates in the top and bottom lines, as reported on Thursday.

Yahoo Finance Live monitors the upward momentum seen by chip stocks reacting to Dell's positive guidance around AI, including Advanced Micro Devices (AMD) and NetApp (NTAP).

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

JULIE HYMAN: The technology, the best performing group today in the S&P 500, Dell is definitely a big part of that. Those shares hitting a record after it reported revenue above expectations in its fourth quarter. It cited surging AI demand.

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That enthusiasm also prompting a better than expected outlook for the full-year from the company. Other names in the chip space rising on the upbeat outlook. And, in particular, what stood out to me from Dell's talk is that its infrastructure business was strong, in particular, AI-optimized servers that are powered by chips, which by the way, Dell said we're getting a little hard to get.

MADISON MILLS: Well, hard to get is the story that's been leading to such a surge in the chip sector. And that's part of the reason why we're seeing the Philadelphia Semiconductor Index on track to close at record highs today as well. That supply and demand relationship is what's been leading to this chip surge.

But they also mentioned that it really comes down to the specifics within the chips and the companies that are able to embrace some innovation when it comes to the chip supplies and silicon chips that are really meeting specific demands from companies. Those are going to be the ones to look at moving forward.

JULIE HYMAN: And also, sort of on a related note, we heard from NetApp as well, which is a data storage company. Those shares are surging also. And that's after it also raised its outlook for earnings per share. So that, too, part of a similar story that is this increase in demand for data both AI-related and not.

MADISON MILLS: The chips that power it and then the places that we store all of our data to good places to be--