AI Drives Markets to Record Highs Despite Iran War — Semiconductors Surge 30%

AI-driven tech stocks are pushing equity markets to all-time highs despite concerns over energy supply disruptions stemming from the Iran conflict. Growing market conviction that helium and sulfur supply uncertainties — ranging from natural gas to specialty industrial gases — cannot meaningfully derail earnings at semiconductor and Big Tech companies is fueling the rally.

The semiconductor ETF (SOXX) has surged more than 30% from its March 30 lows. Most members of the so-called 'Magnificent 7' — including NVDA, AMZN, GOOG, META, and TSLA — have posted double-digit gains. The technology software ETF (IGV) has also moved higher in tandem.

On the 17th (local time), Iran's Foreign Minister announced the full resumption of commercial vessel transit through the Strait of Hormuz, propelling markets to all-time highs for the third consecutive session. Oil prices plunged as much as 12%, with both Brent crude and WTI futures falling below $90 per barrel.

'Heavy Helium and Sulfur Users Can Comfortably Absorb Higher Costs'

At the core of this rally is the market's assessment that the robust profitability of Big Tech and semiconductor firms provides sufficient buffer to absorb rising raw material costs. Even if helium and sulfur supplies used in data center chip and server production face disruptions, high margins are seen as an effective shock absorber.

Morgan Stanley's Chief Asia Economist said in an interview this week, 'Companies that are heavy consumers of helium and sulfur are managing the elevated prices just fine for now.' He specifically referenced the South Korean and Taiwanese semiconductor industries, adding, 'These highly profitable companies are maintaining production lines even as gas, sulfur, and helium prices rise.'

TSM: 'Multi-Sourcing and Safety Inventory Ensure No Supply Disruption'

TSM, the world's largest contract chipmaker, stated during its Q1 earnings conference call that the likelihood of near-term operational disruption from the Iran conflict is low. The CFO noted, 'Specialty chemicals and gases, including helium and hydrogen, are sourced from multiple suppliers across different regions, and we maintain adequate safety inventory.' On energy supply, the company added that it is working closely with Taiwan's state utility and government to secure stable power.

Hyperscalers Shield Against Energy Costs With Long-Term Power Contracts

Wall Street is also taking note of the proactive steps major cloud and AI companies have taken to hedge against rising energy costs. By locking in electricity rates for the next 10 to 20 years through long-term renewable energy Power Purchase Agreements (PPAs), these firms have effectively minimized their exposure to oil price spikes.

In a recent report, Morgan Stanley stated, 'The AI-driven surge in power demand could accelerate the development of low-cost energy sources and technologies,' identifying AI power infrastructure, natural gas, nuclear energy, power grids, and energy storage and carbon solution companies as potential key beneficiaries.

📊 Related Stocks & ETFs

🧠 AI & Semiconductors

· NVIDIA (NASDAQ: NVDA)
· TSMC (NYSE: TSM)
· AMD (NASDAQ: AMD)
· Broadcom (NASDAQ: AVGO)
· Marvell (NASDAQ: MRVL)
· Intel (NASDAQ: INTC)

☁️ Big Tech & Hyperscalers

· Alphabet (NASDAQ: GOOG)
· Amazon (NASDAQ: AMZN)
· Meta (NASDAQ: META)
· Microsoft (NASDAQ: MSFT)
· Tesla (NASDAQ: TSLA)

⚡ AI Power Infrastructure

· NextEra Energy (NYSE: NEE)
· Constellation Energy (NASDAQ: CEG)
· Vistra (NYSE: VST)
· Entergy (NYSE: ETR)
· NuScale Power (NYSE: SMR)
· Oklo (NYSE: OKLO)

📈 ETFs

· iShares Semiconductor ETF (NASDAQ: SOXX) — Benchmark Semiconductor ETF
· iShares Expanded Tech-Software Sector ETF (NYSE: IGV)
· Invesco QQQ (NASDAQ: QQQ)
· Global X Robotics & AI (NASDAQ: BOTZ)
· First Trust NASDAQ Clean Edge Smart Grid (NASDAQ: GRID)
· Sprott Uranium Miners (NYSE: URNM)