Chip stocks staged a significant recovery during pre-market trading on Tuesday, September 29, following the previous day's Wall Street rout. According to reports, the semiconductor sector rebounded strongly with Micron leading gains at 1.57%, followed by SK Hynix rising 1.43% to $184.52. Sandisk advanced 1.2% to $1,733.36, while AMD jumped 0.8% to $613.25. Nvidia climbed 0.69% to $230.4, and Intel traded 0.23% higher at $116.3. This recovery came after major semiconductor stocks had fallen sharply the previous session as investors reduced exposure to the sector following a strong run last week.
The semiconductor sector's renewed optimism was driven by Advanced Micro Devices' announcement of a strategic acquisition. As reported, AMD announced the acquisition of World Labs, an artificial intelligence startup founded by AI pioneer Fei-Fei Li, for $8.2 billion in an all-stock transaction. The deal is expected to close by the end of 2026, subject to regulatory approvals. This acquisition positions AMD as a major competitor to Nvidia in the AI chips business, with the company developing a team of leading researchers and their models to help plan future hardware releases and understand AI segment evolution. Li, a Stanford computer science professor, will join AMD as executive vice president and chief scientist, reporting directly to CEO Lisa Su.
World Labs, founded by Fei-Fei Li who is widely known as the "Godmother of AI," specializes in developing spatial intelligence technology that can simulate 3D environments from images, video and text. The company researches world models that work differently than traditional AI systems, learning how the physical world actually works to simulate and predict events. This technology has applications in robotics and virtual simulations, with Li stating that spatial intelligence models could be used in the future for augmented and virtual reality or robotics. The startup raised $1 billion in February 2026 as it accelerates efforts to advance spatial intelligence research, with the company developing spatial-intelligence models that refer to the ability to reason how the 3D world works rather than relying on 2D data like flat images or text.
In a significant development for the semiconductor sector, Nvidia's board of directors authorized an additional $150 billion for its share repurchase program, bringing the company's total remaining buyback capacity to $235 billion. According to reports, this represents the largest single share repurchase authorization increase in corporate history. Nvidia plans to execute the entire $235 billion repurchase program through fiscal year 2028, with founder and CEO Jensen Huang highlighting that rising free cash flow provides the balance-sheet strength to aggressively reinvest in frontier technologies while returning significant capital to equity holders.
The acquisition comes as AMD this month became the latest equity to reach a $1 trillion valuation due to the massive investment boom over artificial intelligence. Even with the latest surge, AMD's valuation significantly trails rival chip company Nvidia, considered the pace-setter in artificial intelligence. The semiconductor sector's recovery reflects investor confidence in the AI arms race among major chip manufacturers, with AMD's strategic move to acquire World Labs positioning the company to compete more effectively in the rapidly evolving AI market.
