AI Stocks Drive Market Recovery Amid Economic Uncertainty
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Traders in the U.S. returned to the market with renewed enthusiasm for AI stocks this week, leading to significant gains. Shares of Nvidia surged by 5.8%, while Broadcom and Microsoft saw increases of 2.6% and 1.9%, respectively, marking an end to Microsoft's eight-day losing streak, its longest since 2011.
This resurgence has sparked hope among market watchers, particularly as the U.S. Senate has moved closer to a resolution regarding the government shutdown, which is seen as another positive sign for the market, according to CNBC.
However, concerns remain about the high valuations associated with AI companies. For instance, CoreWeave, a company renting Nvidia cards to AI firms, reported a 134% year-over-year revenue increase but still posted a net loss and offered lower-than-expected guidance for this year.
Mark Haefele, Chief Investment Officer of UBS's global wealth management, expressed confidence that AI-related stocks would continue to drive equity markets forward amid the uncertain economic landscape.
Meanwhile, across the Asia-Pacific, markets exhibited mixed trading patterns as they diverged from Wall Street's optimism. Japan's Nikkei 225 index fell by 0.14%, despite some gains in individual AI-related stocks like SoftBank and Renesas Electronics.
South Korea's Kospi index rose by 0.81%, buoyed by AI recovery momentum, but shares of tech giants Samsung Electronics and SK Hynix saw muted performance. In contrast, Australia's S&P/ASX 200 index slipped 0.19%.
Notably, shares of Chinese electric vehicle maker Xpeng skyrocketed by nearly 18% following the launch of its robotaxis and humanoid robots equipped with self-developed AI chips. This marked a significant recovery for Xpeng, which had already seen notable gains earlier in the week.
Overall, the global market's mixed reactions underscore the ongoing volatility surrounding the technology sector, even as U.S. investors display renewed confidence in AI-related stocks amidst broader economic uncertainties.