AI Optimism Propels Nasdaq to New Heights Post-Covid, Led by Nvidia and Dell
America’s Nasdaq index, housing numerous tech giants, has soared to a new pinnacle, buoyed by optimism surrounding artificial intelligence (AI). On Thursday, the Nasdaq surged by 0.9% to 16,091.92, effectively rebounding from the setbacks experienced in 2021.
Investors’ fervent belief in AI’s potential to unlock unprecedented growth has spurred a rush to acquire shares in companies poised to harness its capabilities, exemplified by the fervor surrounding chipmaker Nvidia. This surge in confidence also reflects an increasingly sanguine outlook for the US economy.
The Dow Jones, having rebounded late last year from the challenges of 2022 driven by inflation concerns, edged up 0.1% to close at 38,997 on Thursday. Similarly, the S&P 500 notched another milestone, concluding at 5,096.27, marking a 0.5% increase and attaining a new peak.
Chip giant Nvidia, briefly breaching a market value of $2 trillion this month, emerged as a key driver of this rally, with its shares climbing by 1.87%. Microsoft, bolstered by its announcement of new AI-powered features for financial products, saw a 1.45% rise.
Smaller players such as chipmaker AMD and PC manufacturer Dell, positioned to benefit from the burgeoning demand for AI-enhanced computing solutions, also experienced notable gains.
Investors are hopeful that the US Federal Reserve is nearing the culmination of its battle against inflation, potentially signaling a reduction in interest rates. This prospect of cheaper borrowing costs could invigorate economic activity, further propelling investor and business confidence.
The latest report from the US Department of Commerce indicating a 2.4% decline in the Personal Consumption Expenditures (PCE) price index for January aligns with these expectations.
In a similar vein, Japan’s primary stock index attained an all-time high in February, despite the country’s descent into recession.
Nvidia’s market capitalization surged to $2.06 trillion on Friday, solidifying its position as the third most valuable company on Wall Street, trailing only Microsoft and Apple. Super Micro Computer, another firm utilizing Nvidia’s chips, witnessed a 4.5% surge in its stock.
Other chipmakers poised to benefit from the AI wave, including Broadcom and Marvell Technology, also attained record highs, with the PHLX chip index rallying by 4.3%.
Nvidia’s dominance in the high-end AI chip market, supplying major players like OpenAI, Microsoft, Alphabet, and Meta Platforms, underscores its pivotal role in this transformative industry. Trading activity in Nvidia has soared, with the company becoming the most traded stock by value, surpassing Tesla.
The stock’s meteoric rise in 2024, compounded by a 66% surge following a remarkable performance in 2023, has firmly entrenched Nvidia as a powerhouse in the tech landscape.
In conclusion, Nvidia’s ascent to a $2 trillion valuation, spurred by a bullish outlook on AI and catalyzed by Dell’s optimistic forecast, underscores the transformative potential of artificial intelligence in reshaping the future of technology and finance.
Source: BBC New York, Reuters
Author: DE
