Artificial intelligence has come a long way in the last year, and it is without a doubt one of the dominant factors moving the market. Some AI stocks have performed well this week, beating trading expectations.
But the situation seemed like fears about the Federal Reserve’s continuous fight against inflation were tempering investors’ excitement about the potential of such technology.
With artificial intelligence and expectations of a gentle landing in the US, global stock markets had their greatest first-quarter performance in five years.
The Inflation Report Is Playing a Part
The market’s gains have been fueled by the AI boom. In the first three months of this year, chip designer Nvidia added more than $1tn to its market value, or over one-fifth of the total gain for global stock markets during that time.
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Even though interest rates are still at a two-decade high, investors are closely watching when and whether the central bank will start reducing them. As long as inflation has sufficiently decreased, the central bank has indicated that it will not be moving quickly to lower the benchmark federal funds rate.
Expectations among investors were raised by the government’s most recent monthly report on inflation, which led to a general market upswing.
Which AI Stocks Gained the Most?
Taking into account the previously mentioned factors, S&P Global Market Intelligence data shows that this week saw good spikes in some tech stocks, with increases of more than 12% for Dell (NSYE: DELL); 9.5% for AI server maker Super Micro Computer (NASDAQ: SMCI), also known as Supermicro; 8.5% for AI solutions provider C3.ai (NYSE: AI); and nearly 6% for data processing and analytics provider BigBear.ai (NYSE: BBAI).
Nvidia stock has been trading a bit lower since May 16 as reports about Microsoft considering Advanced Micro Devices (AMD) artificial intelligence chips for its cloud computing side. But Nvidia still managed to gain 2.22% during the past week.
The company is now the third-richest after Apple and Microsoft. Overall, its stock performance has left behind the magnificent seven stocks and is now considered a performance scale for many stocks attached to the sector.
Broadcom also saw 3.66% gains. It is the company that makes TPU circuits for Google, which in its recent I/O integrated AI into almost all its applications, from Gmail to Android. Google’s services are used by billions of people, and these AI functionalities require inferencing, for which these boards will be used.
Newly Found Catalysts Are Here
The market was already surging, and the bullish market doesn’t require any further push, but there are a number of factors fueling the bullish run. The overall broader market index has climbed to 5,300 for the first time, and the Dow has climbed 6% this year. While the tech-heavy NASDAQ is at an all-time high.
Comerica Wealth Management’s chief investment officer said,
“This achievement is a testament to the powers of capital formation, innovation, profit growth, and economic resilience.”
Source: CNBC.
Looking at all the standard sources, including earnings reports, regulatory filings, and adjustments to price targets and analyst ratings, revealed nothing in the way of company-specific information that would have raised these AI stocks this week.
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This tends to imply that the majority of investors who were driving their assets were excited about the little advances in the overall American economy and its macro statistics.
Cryptopolitan reporting by Aamir Sheikh