AI Stocks Lead Market Rally as Nvidia’s CES Keynote Draws Near

The artificial intelligence trade continues to dominate Wall Street as 2026 begins, with semiconductor stocks rallying sharply on the first trading day of the new year. Investors piled into AI-related companies as anticipation builds for Nvidia CEO Jensen Huang’s highly anticipated keynote address at the Consumer Electronics Show (CES) in Las Vegas today.

Chip Stocks Surge to Open 2026

The semiconductor sector kicked off 2026 with impressive gains, building on what was already a stellar 2025. Memory chip maker Micron Technology jumped 10% on Friday, while Dutch chip equipment manufacturer ASML surged 9%. Other major players including Lam Research and Intel rallied more than 6% each, and Marvell Technology rose 5%. Even the industry giants Advanced Micro Devices and Nvidia posted gains of approximately 4% and 1%, respectively.

The rally lifted the VanEck Semiconductor ETF by about 4%, extending its remarkable 49% gain from 2025. The ETF has now posted three consecutive years of growth, with its best-ever performance coming in 2023 when it soared more than 72%.

This sustained momentum underscores investors’ continued confidence in the AI boom that has reshaped technology markets over the past several years. Hyperscalers such as Amazon and Google have committed billions to datacenter infrastructure, fueling unwavering demand for advanced chips and AI hardware.

All Eyes on Jensen Huang’s CES Keynote

The market’s attention today focuses squarely on Nvidia CEO Jensen Huang, who will deliver a 90-minute keynote presentation at 1 p.m. PT (4 p.m. ET) that will be livestreamed on Nvidia’s website. The presentation comes as Nvidia maintains its position as the world’s most valuable publicly traded company, with a staggering market capitalization that reached $4.6 trillion earlier in 2025.

Nvidia’s website promises the company will showcase “cutting-edge AI, robotics, simulation, gaming and content creation” with more than 20 demonstrations planned throughout CES week. While the company typically reserves its biggest announcements for its GTC conference in March, last year’s CES keynote exceeded expectations with reveals including the RTX 5000-series GPUs and Project Digits desktop supercomputer.

Industry watchers anticipate Huang will focus heavily on AI infrastructure developments, including potential updates on successors to the company’s Blackwell chip and new applications for AI in robotics and real-world simulations. Given that the health of the US and global economy appears increasingly linked to AI infrastructure spending, Huang’s remarks will be scrutinized as closely by Wall Street investors as by technology enthusiasts.

The Trillion-Dollar Milestone Approaches

Bank of America analyst Vivek Arya has forecast that global semiconductor sales will surge 30% year-over-year in 2026, finally pushing the sector past the historic $1 trillion annual sales milestone. Arya described the industry as being at the “midpoint” of a decade-long transformation driven by artificial intelligence.

In his report titled “2026 Year Ahead: choppy, still cheerful,” Arya identified six semiconductor companies with dominant market positions as top picks for the year. Beyond Nvidia and Broadcom, he highlighted Lam Research, KLA, Analog Devices, and Cadence Design Systems as companies with “moats that are quantified by their margin structure.”

These companies typically command market shares between 70% and 75% in their respective niches—a level Arya describes as “the norm” for technology leaders. This dominant positioning provides insulation against competition and supports sustained profitability even as the industry experiences what Arya acknowledges will be a “choppy” path to the trillion-dollar threshold.

Valuation Debates and Market Concerns

Despite the optimism, concerns about an AI bubble continue to circulate among some market observers. In November, investor Michael Burry of “Big Short” fame revealed short positions in both Nvidia and AI beneficiary Palantir, later criticizing hyperscalers for artificially inflating earnings.

However, proponents argue that current valuations remain justified by growth prospects. Nvidia, for instance, trades at roughly 0.6 times its price-to-earnings growth (PEG) ratio—appearing cheap compared to the broader S&P 500, which trades close to 2 times. Bank of America points to Nvidia’s projected free cash flow of half a trillion dollars over the next three years as evidence the company remains undervalued relative to its growth trajectory.

The unique economics of the AI chip market also support premium valuations. While the average semiconductor sells for $2.40, an Nvidia graphics processing unit commands approximately $30,000—a price point that reflects both technical sophistication and the critical role these chips play in AI development.

Looking Ahead

As CES 2026 unfolds this week, the technology industry will provide further signals about the trajectory of AI investments and innovation. With AMD CEO Lisa Su also scheduled to present her own keynote later today, along with appearances from Intel and Qualcomm executives, investors will have multiple opportunities to assess the competitive landscape and growth prospects for the semiconductor sector.

The strong start to 2026 suggests that, despite concerns about valuations and potential market corrections, the AI trade remains firmly in favor with investors betting on continued technology transformation across industries.

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