According to Ed Yardeni, AI-fuelled rally is keeping global markets resilient despite oil shock, with oil prices elevated but markets believing the global economy can live with crude around $100 a barrel. Strategic petroleum reserves being tapped by several countries have helped prevent a sharper spike in energy prices, supporting broader market sentiment. South Korea and Taiwan have emerged as major beneficiaries because of their critical role in the AI supply chain, with companies involved in advanced memory production and semiconductor manufacturing seeing strong investor interest as demand for AI infrastructure accelerates globally.
Taiwan Semiconductor Manufacturing (TSMC) delivered exceptional Q1 2026 results, with revenue surging 41% year-over-year and gross margin expanding 7.4 percentage points to 66.2%. The chip manufacturer's operating margin reached 58.1%, representing a 9.6 percentage point improvement from the previous year. AI represents TSMC's strongest growth driver, with the high-performance computing segment growing 20% quarter-over-quarter and accounting for 61% of total revenue. As reported by multiple sources, TSMC's earnings reports typically precede other tech companies and serve as a strong signal of what's to come in the semiconductor sector.
Broadcom (AVGO) reported Q1 AI semiconductor revenue of $8.4B up 106% year-over-year and guided Q2 to $10.7B, demonstrating the company's successful capture of AI infrastructure spending beyond traditional training chips. The company is benefiting from hyperscaler capital expenditure climbing above $700B annually, which is spreading AI infrastructure spending across foundries, custom silicon, networking fabric, and enterprise deployment tools. Broadcom and TSMC are capturing accelerating share in this expanding market, with Broadcom's strong performance reflecting the diversification beyond the original AI-11 companies.
The AI trade has evolved beyond the traditional Mag-7 hyperscalers as semiconductor companies have significantly outperformed the original seven major technology stocks. According to reports from Investing.com India, almost every major semiconductor stock price in the "AI-11" has beaten all the Mag-7 names, except Broadcom. This shift reflects growing investor confidence in the broader AI supply chain beyond the dominant cloud companies, with semiconductor ETFs reaching new record highs in April as hyperscaler capital expenditure continues to boost demand for AI components. As reported by Ed Yardeni, investors have realized that while there may be uncertainty about the profitability of hyperscalers' AI capex, there is no doubt that their massive capex will boost demand for semiconductors and related AI components.
Memory chip companies have emerged as the standout performers in the AI supply chain expansion. As reported by Investing.com India, SK Hynix, Samsung, SanDisk (NASDAQ:SNDK), Micron (NASDAQ:MU), and Western Digital (NASDAQ:WDC) have all moved sharply higher since late last year. These companies supply the high-bandwidth memory that serves as the actual bottleneck for AI training, with SK Hynix leading the HBM market globally. The memory sector's strong performance reflects the critical role these companies play in supporting the massive AI compute demand that continues to outpace supply. As noted by Ed Yardeni, leading the way higher have been the memory chip companies in the US and South Korea, with their stock prices continuing to rise since the positive tilt in March 2024.
The AI-11 represents a comprehensive ecosystem that extends beyond the original hyperscalers. According to Investing.com India, the supply chain includes foundry and lithography companies (TSMC, ASML), logic and custom silicon providers (AMD, Broadcom, Intel), memory manufacturers (Micron, SK Hynix, Samsung), and enterprise storage companies (SanDisk, Western Digital). Every dollar of hyperscaler AI infrastructure capex flows through this supply chain before reaching server racks, explaining why high-tech now accounts for a record 55% of US capital spending. This diversification beyond the Mag-7 demonstrates the expanding nature of the AI investment opportunity, with Ed Yardeni noting that no wonder high-tech now accounts for a record 55% of US capital spending.
The next phase of the AI boom is expected to be even kinder to pick-and-shovel plays across the entire infrastructure stack, as agentic AI drives inference loads that dwarf training and every gigawatt of new compute pulls dollars through a long supply chain. Retail investors are starting to see this opportunity, with a widely shared wallstreetbets thread titled "Every Layer of the AI Money Printer Got Front-Run. Except One" pulling 1,975 upvotes as investors hunt for infrastructure companies with room to run. The expansion beyond traditional AI-11 companies reflects the maturation of the AI ecosystem, with hyperscaler capital expenditure creating opportunities across foundries, custom silicon, networking fabric, and enterprise deployment tools where companies like Broadcom and TSMC are capturing accelerating market share.
