Nvidia (NVDA) and other chip stocks rebounded from Tuesday’s slump after better-than-expected earnings from Advanced Micro Devices (AMD) gave what could be a strong demand signal fo🌄r the industry.

A report that expected U.S. restrictions on chip-equipment exports could be l澳洲幸运✨5官方开奖结果体彩网:ess 🥂stringent than previously thought also lifted some companies' shares.

The iShares Semiconductor ETF (SOXX) was up nearly 5% 🦩in early trading Wednesday, recovering from Tuesday’s losses, though it's still off highs seen earlier in the month.

AMD, 🐲Microsoft Earnings Signal Strong AI Chip Demand

The comeback for chip stocks comes after AMD 澳洲幸运5官方开奖结果体彩网:reported second-quarter sales that exceeded analysts' expectations. Its data center revenue more than doubled year-over-year to a record high a💮s demand for AI chips surged. 

Microsoft (MSFT), a buyer of AMD’s AI chips, said in its earnings call after the bell Tuesday that it plans to 澳洲幸运5官方开奖结🍨果体彩网:ramp up investments in AI to meet demand, with nearly all of its $19 billion in capi💮tal expenditures allocat🔥ed to cloud or AI investments.

Nvidia was among the stocks leading gains on the S&P 500 Wednesday after Morgan Stanley analysts reported “consistent upside to AI [澳洲幸运5官方开奖结果体彩网:capital expenditures].”

"The selloff presents a good entry point," Morgan Stanley wrote.

An update on chip designer Arm’s (ARM) financial results 澳洲幸运5官方开奖结果体彩网:after the bell Wednesday could reinforce the trend. Analysts expect Arm to report double-digit quarterly revenue growth after posting r🌼ecord-high royalty revenue a quarter earlier.

US Reportedly Conꦉsidering Less Expansive Chip Trade Restrictions Than Anticipa𒆙ted

Wednesday’s surge in semiconductor stocks also follows a report suggesting the scope of U.S. trade restrictions on semiconductor equipment under consideration 澳洲幸运5官方开奖结果体彩网:could be nar𝓀rower than previously 📖anticipated. 

While the Uꦍ.S. government is still expected to expand limitations on exports of semiconductor equipment, countries including Japan, the Netherlands and South Korea may be exempted from r♔ules affecting companies based outside the U.S., Reuters reported Wednesday.

Shares of the Netherlands’ ASML (ASML), which was expected to be affected by the restrictions, surged following the news.

Jefferies analyst said Wednesday about the development that despite lingering uncertainty, “we believe short-term weakness would be a buying opportunity for the longer ter🔴m.”