Foxconn’s Spotlight on AI Demand Drives Chip Stock Rally in S&P 500 Gains

The first full week of 2025 has begun with a mixed performance across major U.S. equities indexes, including the S&P 500, which added 0.6% on Monday, January 6.

Key Takeaways

• The surge in semiconductor stocks led by Taiwan-based technology manufacturer Foxconn’s record revenue for the fourth quarter.
• Analysts highlighted upside potential for electronic testing equipment maker Teradyne (TER), citing strong demand from cloud computing companies.
• Shares of data analytics software maker Palantir Technologies (PLTR) sank 5% as Morgan Stanley reinstated coverage with an ‘underweight’ rating.

Semiconductor Stocks Rise Amid AI Server Optimism

Taiwan-based technology manufacturer Foxconn posted record revenue for the fourth quarter, citing strong demand for artificial intelligence (AI) servers. This optimism helped boost shares of companies across the semiconductor industry, including AI chip behemoth and key Foxconn customer Nvidia (NVDA), whose shares added 3.4%.

Teradyne: Upgraded to ‘Outperform’

Shares of electronic testing equipment manufacturer Teradyne jumped 7.2% after Northland Securities upgraded the stock to ‘outperform’ and boosted its price target. Analysts believe Teradyne is well positioned to gain market share in the sector as cloud computing companies use the firm’s testing platform to design application-specific integrated circuits (ASICs).

Palantir Technologies: Sinks 5%

Shares of data analytics software maker Palantir Technologies sank 5% as Morgan Stanley reinstated coverage on the stock with an ‘underweight’ rating. Although analysts recognized Palantir’s strong trajectory, they suggested the company’s success is more than priced into the current valuation after the stock skyrocketed in 2024.

Other Notable Stocks

• Axon Enterprise (AXON) shares fell the most of any S&P 500 stock on Monday, tumbling 5.1% to their lowest level since the manufacturer of the Taser and other law enforcement equipment posted stronger-than-expected quarterly sales and profits in early November.
• Shares of memory solutions specialist Micron Technology (MU) surged 10.5%, notching Monday’s strongest performance in the S&P 500, as analysts expect an update on the newest iteration of Nvidia’s Blackwell AI chips at the CES conference.

Market Outlook

Major U.S. equities indexes were mixed at the onset of the first full week of 2025, which will include a day off from trading on Thursday in remembrance of former U.S. President Jimmy Carter, followed by the expected release of the December jobs report on Friday morning. Analysts pointed to concerns about T-Mobile’s valuation and a potential slowdown in growth during 2025.

Stock Price Movement

| Company | Previous Close | Current Close | Percentage Change |
| — | — | — | — |
| NVDA (Nvidia) | $513.99 | $532.49 | +3.4% |
| TER (Teradyne) | $67.19 | $72.23 | +7.2% |
| MU (Micron Technology) | $34.59 | $38.26 | +10.5% |

Analyst Ratings

• Nvidia (NVDA): Buy rating from Northland Securities
• Teradyne (TER): Upgrade to ‘outperform’ with a price target of $85 by Northland Securities
• Palantir Technologies (PLTR): Underweight rating from Morgan Stanley