CNBC Daily Open: A chip off the AI block

Hello, this is Leonie Kidd coming to you from London.

"Extreme ultraviolet lithography" is not something one considers every day, but investors are finding themselves having to brush up on their semiconductor chip technology to keep ahead of the more extreme stock moves over recent weeks.

Knowing where a company sits in the AI stack, where agentic meets generative, and how to assess servers versus storage is becoming ever more crucial for tracking the runners and riders in the AI race.

Dutch chip equipment maker ASML should cheer investors this morning following a hike to its full-year revenue guidance. The group expects net sales to rise to as much as 45 billion euros and sees its gross margin at 54%, above previous forecasts. On ASML's valuation, Javier Correonero, senior equity analyst at Morningstar, told CNBC's "Europe Early Edition" that "expectations for the stock could be too high" in the medium term.

It was a tale of two sessions for other AI-related stocks.

IBM stock cratered 25% on Tuesday, marking its worst day on record, after preliminary second-quarter results fell short of expectations. CEO Arvind Krishna blamed the shortfall on weakness in the software and infrastructure business, as clients shifted spending toward hardware purchases such as memory chips.

Meanwhile, South Korea's SK Hynix has bounced back during the Asian trading day on Wednesday, leading a broad rally across the sector. Despite Wednesday's rebound, some investors warned that enthusiasm around AI-linked hardware stocks is becoming stretched.

"I'm starting to see some really concerning behavior in markets," Jvetanovski, chairman of Pella Funds, told CNBC's "Squawk Box Asia," adding the recent volatility has "all the classic signs that we are in for a kind of rude shock coming in the AI space."

Oil prices are still elevated in early Wednesday trading as U.S. forces carried out another round of strikes against Tehran, and Washington reinstated its naval blockade of Iranian ports near the Strait of Hormuz. 

President Donald Trump took to Truth Social to announce a swift reversal of his plan to charge a 20% toll to ships transiting the Strait of Hormuz, saying he would replace this with "Trade and Investment Deals that the various Gulf States will be making to the United States."

China's GDP growth has slowed to its lowest pace in over three years. GDP came in at 4.3% in April, coming in short of the 4.5% forecast by a Reuters poll, and sharply lower than the 5% rate in the first quarter.

The National Statistics Bureau noted "acute" imbalance between excess supply and sluggish demand, urging policymakers to step up "counter- and cross-cyclical adjustments."

— Leonie Kidd