Nasdaq 100 tech stocks surged to record highs this week, snapping a fifth straight week of gains, their longest winning streak since January, driven by a stellar earnings report from Nvidia.
Shares in the artificial intelligence giant surged more than 9% after it reported first-quarter results that showed revenue up 262% from a year ago, beating expectations and sparking a broader rally in semiconductor stocks.
Solar power stocks posted their best week since December 2023 as they reacted to President Joe Biden's tariff hikes on Chinese imports, including big price hikes for solar cells.
Risk sentiment in non-tech sectors weakened after hawkish Fed minutes and an S&P Global survey of companies showed renewed inflation fears and raised concerns about longer-term higher interest rates. The Dow Jones Industrial Average fell on Thursday, its first drop in more than a year.
The enthusiasm around meme stocks faded this week, with GameStop plummeting and becoming the worst-performing stock in the Russell 1000.
The Trillion Dollar AI Market
Wedbush analyst Dan Ives predicted that the AI revolution will drive the tech industry to a $1 trillion valuation following NVIDIA's stellar quarterly results. NVIDIA's data center business grew 427%, helping drive the stock price higher. Ives likened the AI boom to the 1995 Internet revolution and predicted significant investor participation and transformative growth will have a major impact on the tech industry.
Inflationary pressures rise
According to a Charles Schwab sentiment survey, retail investors are increasingly stressed about inflation and skeptical of the Federal Reserve cutting interest rates, bullish sentiment towards U.S. stocks fell to 46% in the second quarter, and 79% view cryptocurrencies as a risky investment.
Ethereum ETF is on the horizon
The U.S. Securities and Exchange Commission approved the first step toward a spot Ethereum exchange-traded fund on Thursday, paving the way for increased mainstream and institutional investment in the second-most valuable cryptocurrency. The approval reflects growing regulatory acceptance of cryptocurrencies and could lead to inflows from mainstream investors.
Meme stocks fall
Interest in meme stocks like GameStop and AMC has waned since Roaring Kitty retreated from social media, with investors on Reddit's WallStreetBets forum now turning their attention to other stocks, including Nvidia, Tesla and Nikola.
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Benzinga is a financial news and data company based in Detroit.
