In a notable turnaround for the sector, AI-focused stocks experienced a significant rebound on Friday, suggesting a renewed confidence among investors. This surge follows a series of positive developments within the industry. Leading the charge, technology stocks propelled major indexes upward, with several favorites among AI investors showing impressive performance.
A standout performer was cloud computing giant Oracle, whose shares bounced back over 8%. This resurgence comes after recent concerns regarding its reliance on a limited number of large AI clients. The boost in Oracle’s stock price was linked to reports indicating that the company is set to make a substantial investment in a new joint venture with TikTok.
Another highlight was Micron Technology, a major memory chip supplier, which saw its stock rise more than 6%. This climb followed a strong quarterly performance driven by heightened demand for AI-related products, surpassing analysts’ expectations. Advanced Micro Devices also enjoyed a nearly 6% increase, while Nvidia’s shares rose by 3%. This uptick coincided with reports that the Trump administration has begun reviewing Nvidia’s H200 chip exports to China, further influencing market dynamics. The broader semiconductor sector experienced gains, lifting the PHLX Semiconductor Sector Index close to 3%.
Other tech companies benefitted from the upward trend as well. Server manufacturer Super Micro Computer, data analytics firm Palantir, and networking service provider Arista Networks all saw increases in their stock prices.
For investors, this resurgence is particularly significant given the AI sector’s critical role in driving market gains over recent years. However, the trade had recently faced challenges, raising concerns reminiscent of the dotcom bubble’s circular deals. Nevertheless, the substantial gains realized on Friday, following a wave of encouraging news, could indicate a shift towards improving sentiment within the industry.
In a noteworthy development, shares of Google parent company Alphabet and cybersecurity firm Palo Alto Networks both rose by around 1%. This uptick followed the announcement of a multibillion-dollar deal that expands their existing partnership. As part of this agreement, Google’s cloud customers will gain access to new cybersecurity features from Palo Alto Networks, while the latter will integrate Google’s models for its copilots and leverage Google Cloud’s Vertex AI platform.
Analysts at UBS have noted that despite the recent challenges faced by the AI trade, they remain optimistic about the sector’s long-term growth prospects. In a statement, they remarked, “Notwithstanding the uncertainty, we remain constructive on the theme amid a resilient earnings growth outlook,” reinforcing the bullish sentiment surrounding AI investments.
