Advance in AI linked companies drives Asian markets to record highs despite inflation, war in Iran

The relentless advance in AI linked companies has powered Wall Street, Taiwanese, Japanese and South Korean stock markets to record highs this week, despite the damage from soaring inflation and energy prices linked to the war on Iran.

In particular, the ballooning mania for computer-chip stocks has dominated investment returns in 2026 to leave investors asking whether their run higher is justified as the AI revolution heats up, or another valuation bubble likely to pop.

On Wednesday, South Korean computer-chip business SK Hynix jumped 9.3 per cent on the Kospi stock exchange to a $US1 trillion ($1.4 trillion) valuation. It has now raced 1000 per cent higher in 12 months and joined Samsung and Taiwan Semiconductors (TSMC) as Asia’s third computer chip business valued at more than $US1 trillion.

“Their earnings have been great so to an extent that justifies the stock prices shooting up,” said Damien Klassen the founder of Nucleus Wealth Management.

“But these memory companies are cyclical in terms of sales. If you look back 25 years the demand has always been boom and bust. But with AI now there’s real supply constraints as everyone is building data centres that adds to wild demand for AI products in other applications.”

across both Nvidia’s computer chips required to act as the brain in computers or artificially intelligent machines to the memory chip manufacturers such as SK Hynix and Micron.

Elsewhere shares in computer memory chip manufacturer Micron surged 23 per cent on Wall Street this week and have rocketed 835 per cent to a $US1 trillion valuation in the past year.

“Boy, Micron is great,” US President Trump told a rally in New York on May 22.

The rally in computer memory businesses and surging Asian stock indices means AI’s role in reshaping economies and investment returns has now spilled early winner Nvidia to a broader swathe of companies enriching early investors.

Chip stocks dominate share markets

Both SK Hynix and Micron are now worth more than Warren Buffett’s investment giant Berkshire Hathaway.

While computer chip or memory manufacturers, Nvidia, Broadcom, TSMC, Samsung, SK Hynix, and Micron now make up six of the 14 largest companies in the world by market value.

“The whole AI narrative is a very long-term story,” said Michael McCarthy the CEO of Moomoo Australia. “It’s going to change the world, have no doubt, but the way it does is open for debate,”

On Wednesday, Wall Street hit a fresh record high bolstered by a chorus of brokers ignoring the Middle East conflict and rising energy prices to lift their price targets for the S&P/500 Index.

Micron jumped another 4 per cent on Wednesday as frenzied buying of its shares pushed its valuation from $US500 billion to $US1 trillion in just 48 days. That’s the fastest valuation jump between the two financial landmarks on record for a company considered unremarkable before the AI boom took off with the launch of ChatGPT in November, 2022.

“No one really knows where the end of this AI cycle is for these computer and memory chip names,” said Klassen.

“Maybe it will be an extended cycle and they do great for another few years and make enough money to justify more price gains, but these are cyclical companies and so I think yes it’s an earnings [profit] bubble, and a little bit of a valuation bubble, but it’s hard to say when it’ll finish.”

Klassen also argued share prices across semiconductor stocks could easily lose halve their value, or more, if their profit growth topped out over the next six months.

“But this cycle could go on for another 18 months, they make bucket loads more money and prices keep rising,” he said.

According to Bloomberg, semiconductor or computer hardware businesses now make up 18 per cent of the total market cap of the S&P 500 Index.

The sector’s blistering 12-month rise has also been bolstered by a chorus of Wall Street brokers and investment banks urging investors to own a part of the market theoretically insulated from the cost of an inflation linked to the Middle East conflict.

Australia eyes data centre boom

In Australia, the S&P/ASX 200 is up 3.6 over the past year and has no high-tech manufacturing businesses positioned to benefit from the trillions of dollars being spent on AI.

The index’s high-tech healthcare manufacturers, CSL and Cochlear, have even tumbled in value over the past year after disappointing investors with sales and profit growth.

“Outside of a very small selection of winners [the share market] is now basically becoming a value proposition for investors who can look beyond the immediate headwinds,” said McCarthy.

According to Klassen, the runaway growth of Samsung and SK Hynix shows Australia should funnel more investment into productive assets including high-tech manufacturing.

“We need to do something other than digging stuff out of the ground and selling [housing] mortgages to each other at higher prices,” he said. “We need more companies out there trying to do new things. The Australian market is 70 per cent resources or ticket clippers, rather than companies doing stuff that may benefit the world.”

Still, the AI boom is spilling across parts of the market. Shares in computer hardware distributor Dicker Data jumped nearly 9 per cent on Wednesday after it said AI-related revenue jumped over the first four months of 2026.

Elsewhere, industrial property giant Goodman Group has committed $14 billion to invest in data centres across France, Germany, Australia the US and Hong Kong. In an operating update on Wednesday the group said it has raised more than $9 billion from investors in itself and its partners over just the past 9 months.

“AI adoption is accelerating, compute capacity globally remains constrained,” Goodman said on Wednesday. “As AI models shift from training to inferencing, particularly through Agentic AI, demand is concentrating in metropolitan markets where inferencing workloads requires proximity to users.”

Goodman’s $64 billion market cap makes it one of the largest ASX-listed businesses directly seeking to profit from surging demand for AI services.

Other pureplay data centre businesses on the ASX such as NextDC and Macquarie Technology have aggressively raised more than $1 billion in funds from investors via the issue of debt or equity over the past year.

Later in 2026 start-up data centre players Firmus and SharonAI also hope to raise billions of dollars from investors as part of their plans to become the first big AI-linked listings on the ASX.