AI Stocks Surge as Investors Reenter Market Post-Government Shutdown

Investors are showing renewed enthusiasm for artificial intelligence stocks following the recent resolution of the U.S. government shutdown. According to CNBC, shares of major tech companies involved in AI surged on a Monday trading session.

Nvidia led the charge, experiencing a jump of 5.8%, while Broadcom and Microsoft also saw gains of 2.6% and 1.9%, respectively. This marked the end of Microsoft's eight-day losing streak, its longest decline since 2011.

The optimism around AI stocks is further bolstered by the hope that the government shutdown, which has caused uncertainty in the market, will finally be resolved. The U.S. Senate has voted in favor of a deal to reopen the government, pending approval from the House and President Donald Trump, who has already given his support to the measure.

Despite the positive market reaction, there are still concerns regarding the high valuations of AI stocks. For instance, CoreWeave, a company that rents Nvidia cards to AI firms like Google and Microsoft, reported a 134% year-on-year revenue increase but also posted a net loss and provided lower-than-expected guidance for the year.

This financial pattern echoes the situation of OpenAI, a leading player in the AI space that has also faced significant financial challenges. Mark Haefele, Chief Investment Officer at UBS's global wealth management, expressed confidence that AI-related stocks are poised to drive equity markets moving forward.

In Asia-Pacific markets, however, the reaction was mixed, with some indices losing ground despite Wall Street's gains. Japan's Nikkei 225 index fell slightly, while the Topix index managed a modest gain.

Meanwhile, the South Korean Kospi index increased by 0.81% after strong AI stock performances on the previous day. Notably, Xpeng, a Chinese electric vehicle manufacturer, saw its shares soar nearly 18% after launching robotaxis and humanoid robots equipped with self-developed AI chips.

This surge indicates a broader trend within the technology sector where AI advancements are being closely watched and are driving investor sentiment. Overall, the resurgence in AI stocks post-government shutdown reflects a strong belief among investors in the potential of these technologies to significantly contribute to economic growth in the near future.