What happened: Semiconductor stocks rallied on Tuesday, with the PHLX Semiconductor Index (SOXX) surging over 6%, helping send the S&P 500 (^GSPC) to new highs. US-listed shares of memory and storage leaders Micron Technology (MU) and SK Hynix (SKHY) jumped 8% and 6%, respectively. AI chip heavyweight Nvidia (NVDA) gained nearly 2%, while shares of AMD (AMD) jumped 7% ahead of the company's quarterly results. The rally follows a volatile stretch for AI infrastructure stocks, driven by concerns about overinvestment and intensifying competition from China. Worries about China's advancement in AI, driven by less expensive models, have also weighed on the AI infrastructure trade.