Tech Bubble Record About to Be Popped as Chip Stocks Rally

Chip stocks are poised to close in record territory after this year’s gains have pushed the Philadelphia Semiconductor Index back to levels not seen since the peak of the bubble more than 17 years ago, according to Bloomberg.

Fueled by rising demand, record profits and an unprecedented number of mergers, the index of 30 semiconductor and related equipment manufacturers is up 47 percent this year and has doubled since the start of 2016. Tuesday’s 1 percent gain would finally be enough to lift the gauge above its March 2000 record, more than two years after the tech-heavy Nasdaq Composite Index topped its bubble-era peak.

Chipmaker shares got a boost Monday when Marvell Technology announced an agreement to buy Cavium for about $6 billion in cash and stock. Earlier this month, Broadcom offered to buy Qualcomm for $105 billion, which would be the largest technology deal in history. Qualcomm rejected the unsolicited proposal, setting up a proxy battle.

Other companies including Nvidia and Micron have also seen huge gains as expanded use of chips drives higher profits. Once mainly confined to computers and phones, the tiny devices are showing up everywhere from washing machines to autonomous driving systems.