The Nasdaq Composite Index achieved a milestone after, than two years closing at a record high on Thursday signaling a strong comeback for the technology sector.
This recent surge, which led the Nasdaq to gain 144.18 points and reach 16,091.92 surpasses its peak set on November 19 2021. The increase is largely credited to the growing interest in intelligence (AI) boosting the stocks of tech companies like Nvidia.
Investors increasing optimism about an AI driven expansion has been instrumental in maintaining valuations for tech stocks despite market fluctuations. Rick Meckler from Cherry Lane Investments in New Vernon, New Jersey pointed out that these stock prices continue to rise due to revenue growth tied directly to advancements in AI technology.
Nvidia has become a player in this market shift by surpassing Tesla as the actively traded company on Wall Street. With its presence in the high end AI chip market and control over 80% of the sector Nvidia has become essential for major players, in the field of artificial intelligence.
In the field of AI companies, like OpenAI, Microsoft, Alphabet and Meta Platforms are vying for dominance heavily relying on Nvidias popular components.
The Nasdaqs recent climb to a peak followed a period in December 2022 when the index dropped over 30% from its high in November 2021. Concerns about inflation and increasing interest rates prompted investors to pull from valued growth stocks. However the market rebounded with optimism around Federal Reserve rate cuts and the excitement surrounding AI advancements.
Nvidia has notably seen a 60% surge in its stock price this year surpassing Amazon and Alphabet to claim the third spot as Wall Streets most valuable company with a market cap of $1.94 trillion. Microsoft has also witnessed growth with a 10% increase in valuation reaching $3.03 trillion overtaking Apple as the worlds valuable company.
The Nasdaq hitting a signifies an important moment, for Wall Street as it becomes the final major stock index to reach this milestone.
After experiencing declines throughout 2022 the S&P 500 and the Dow Jones Industrial Average have recently reached all time highs suggesting an improvement, in various market segments. This comeback, supported by the surge in technology stocks driven by AI and overall positive market sentiment presents an outlook for the tech industrys future and its influence, on the economy.