Analyst: AI boom is the next tech revolution
Tech stocks in the Nasdaq 100 soared to record highs during the week, marking their fifth consecutive week of gains — the longest streak since January — driven by Nvidia's exceptional earnings report.
Shares of the artificial intelligence giant surged over 9% following its first-quarter financial results, which revealed a 262% year-over-year increase in sales, exceeding expectations and sparking a broad-based rally in semiconductor stocks.
Solar stocks enjoyed their best week since December 2023, potentially in response to President Joe Biden’s increased tariffs on Chinese imports, including a significant hike on solar cells.
Risk sentiment waned in non-tech sectors, as hawkish Fed meeting minutes and S&P Global’s business surveys indicated renewed inflationary concerns, raising fears of prolonged higher interest rates. The Dow Jones fell on Thursday, suffering its worst session in over a year.
The hype around meme stocks deflated this week, with GameStop plummeting and marking the worst performance among Russell 1000 stocks.
AI’s trillion-dollar market
Wedbush analyst Dan Ives forecast trillion-dollar valuations in tech, driven by the AI revolution, following Nvidia's stellar quarterly results. Nvidia's data center business grew 427%, fueling its stock rally. Ives likens the AI boom to the 1995 internet revolution, predicting a significant impact on the tech industry with substantial investor participation and transformative growth.
Inflation stress rises
Retail traders are increasingly stressed by inflation and skeptical of Federal Reserve rate cuts, according to a Charles Schwab sentiment survey. Bullish sentiment on U.S. stocks fell to 46% in the second quarter, while 79% view cryptocurrencies as risky investments.
Ethereum ETFs on the horizon
The Securities and Exchange Commission approved the first step on the path to spot Ethereum exchange-traded funds Thursday, paving the way for increased mainstream and institutional investment in the second most valuable cryptocurrency. The approval reflects growing regulatory acceptance of cryptocurrencies, potentially leading to capital inflows from mainstream investors.
Meme stocks decline
Interest in meme stocks like GameStop and AMC has waned following Roaring Kitty's exit from social media. Investors on Reddit’s WallStreetBets forum are now focusing on other stocks, including Nvidia, Tesla and Nikola.
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Benzinga is a financial news and data company headquartered in Detroit.
This article originally appeared on Detroit Free Press: Analyst: AI boom is the next tech revolution
