FRANKFURT/SEOUL/NEW YORK/PARIS (dpa-AFX) - Investors are swiftly seizing on depressed prices in the global semiconductor sector to re-enter the market. Last Friday, a wave of profit-taking swept through the industry, particularly in New York, before reaching Asia on Monday. However, by Monday afternoon, investors had already begun to view the lower valuations as a buying opportunity. Market participants suggest that the enthusiasm surrounding Artificial Intelligence (AI) remains undeterred by the recent price slide.

On the previous evening, U.S. industry peers such as Marvell Technology, Micron, and Intel staged a vigorous recovery in New York. On South Korea's tech-heavy exchange, the benchmark Kospi index more or less recouped its more than eight percent loss from the start of the week on Tuesday. Shares of industry giant SK Hynix surged by nearly eleven percent in Seoul on Tuesday, while further gains are shaping up for U.S. sector stocks in pre-market trading.

Consequently, European industry stocks also showed further signs of stabilization on Tuesday: led by Infineon, which climbed two percent in the Dax to return toward the 80-euro mark. The German benchmark index posted moderate gains.

Equipment suppliers such as Aixtron, Suss, and PVA Tepla also moved into positive territory, as did shares of European players ASML and STMicroelectronics. 'Sentiment in the technology sector is nervous but remains optimistic,' wrote market observer Andreas Lipkow of broker CMC Markets.

Markets appear to be rapidly returning to previous narratives, based on the assumption that memory infrastructure represents the primary bottleneck in the value chain. In addition to chipmakers, memory manufacturers have long benefited from this, but more recently, the broader circle of IT infrastructure, extending to networking, has also seen gains. Conversely, software stocks remain under pressure due to concerns that AI could jeopardize their business models. SAP, for instance, lost nearly one percent on Tuesday.

'Currently, there is much to suggest that the pace of AI development continues to be underestimated,' commented analyst Hagen Ernst of asset manager DJE Kapital. He noted that the demand for AI computing capacity and the monetization of AI applications are the decisive factors. As long as available capacities remain insufficient, he expects the trend to persist - with the most significant bottlenecks occurring in memory chips and power capacity.

Infineon shares had already gained ground the previous day after research house Arete stood out from the analyst pack with a triple-digit price target. Expert Jim Fontanelli believes the German chip group could rise as high as 114 euros due to its AI revenue potential, which currently implies an upside of more than 40 percent - even though the share price has already more than doubled year-to-date./tih/la/stk