Jen-Hsun Huang, president and chief executive officer of Nvidia Corp., speaks during the company’s event at Mobile World Congress Americas in Los Angeles, California, U.S., on Monday, Oct. 21, 2019.
Patrick T. Fallon | Bloomberg | Getty Images
Forget about the debt ceiling. Tech investors are in buy mode.
The Nasdaq Composite closed out its fifth-straight weekly gain on Friday, jumping 2.5% in the past five days, and is now up 24% this year, far outpacing the other major U.S. indexes. The S&P 500 is up 9.5% for the year and the Dow Jones Industrial Average is down slightly.
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Excitement surrounding chipmaker Nvidia’s blowout earnings report and its leadership position in artificial intelligence technology drove this week’s rally, but investors also snapped up shares of Microsoft, Meta and Alphabet, each of which have their own AI story to tell.
And with optimism brewing that lawmakers are close to a deal to raise the debt ceiling, and that the Federal Reserve may be slowing its pace of interest rate hikes, this year’s stock market is starting to look less like 2022 and more like the tech-happy decade that preceded it.
“Being concentrated in these mega-cap tech stocks has been where to be in this market,” said Victoria Greene, chief investment officer of G Squared Private Wealth, in an interview on CNBC’s “Worldwide Exchange” Friday morning. “You cannot deny the potential in AI, you cannot deny the earnings prowess that these companies have.”
To start the year, the main theme in tech was layoffs and cost cuts. Many of the biggest companies in the industry, including Meta, Alphabet, Amazon and Microsoft, were eliminating thousands of jobs following a dismal 2022 for revenue growth and stock prices. In earnings reports, they emphasized efficiency and their ability to “do more with less,” a theme that resonates with the Wall Street crowd.
But investors have shifted their focus to AI now that companies are showcasing real-world applications of the long-hyped technology. OpenAI has exploded after releasing the chatbot ChatGPT last year, and its biggest investor, Microsoft, is embedding the core technology in as many products as it can.
The chipmaker, known best for its graphics processing units (GPUs) that power advanced video games, is riding the AI wave. The stock soared 25% this week to a record and lifted the company’s market cap to nearly $1 trillion after first-quarter earnings topped estimates.
Nvidia shares are now up 167% this year, topping all companies in the S&P 500. The next three top gainers in the index are also tech companies: Meta, Advanced Micro Devices and Salesforce.
The story for Nvidia is based on what’s coming, as its revenue in the latest quarter fell 13% from a year earlier because of a 38% drop in the gaming division. But the company’s sales forecast for the current quarter was roughly 50% higher than Wall Street estimates, and CEO Jensen Huang said Nvidia is seeing “surging demand” for its data center products.
Nvidia said cloud vendors and internet companies are buying up GPU chips and using the processors to train and deploy generative AI applications like ChatGPT.
“At this point in the cycle, I think it’s really important to not fight consensus,” said Brent Bracelin, an analyst at Piper Sandler who covers cloud and software companies, in a Friday interview on CNBC’s “Squawk on the Street.”
“The consensus is, on AI, the big get bigger,” Bracelin said. “And I think that’s going to continue to be the best way to play the AI trends.”
Microsoft, which Bracelin recommends buying, rose 4.6% this week and is now up 39% for the year. Meta gained 6.7% for the week and has more than doubled in 2023 after losing almost two-thirds of its value last year. Alphabet rose 1.5% this week, bringing its increase for the year to 41%.
One of the biggest drags on tech stocks last year was the central bank’s consistent interest rate hikes. The increases have continued into 2023, with the fed funds target range climbing to 5%-5.25% in early May. But at the last Fed meeting, some members indicated that they expected a slowdown in economic growth to remove the need for further tightening, according to minutes released on Wednesday.
Less aggressive monetary policy is seen as a bullish sign for tech and other riskier assets, which typically outperform in a more stable rate environment.
Still, some investors are concerned that the tech rally has gone too far given the vulnerabilities that remain in the economy and in government. The divided Congress is making a debt ceiling deal difficult as the Treasury Department’s June 1 deadline approaches. Republican negotiator Rep. Garret Graves of Louisiana told reporters Friday afternoon in the Capitol that, “We continue to have major issues that we have not bridged the gap on.”
Treasury Secretary Janet Yellen said later on Friday that the U.S. will likely have enough reserves to push off a potential debt default until June 5.
Alli McCartney, managing director at UBS Private Wealth Management, told CNBC’s “Squawk on the Street” on Friday that following the recent rebound in tech stocks, “it’s probably time to take some of that off the table.” She said her group has spent a lot of time looking at the venture market and where deals are happening, and they’ve noticed some clear froth.
“You’re either AI or you’re not right now,” McCartney said. “We really have to be ready to see if we don’t get a perfect debt ceiling, if we don’t get a perfect landing, what does that mean, because at these kinds of levels we are definitely pricing in the U.S. hitting the high note on everything and that seems like a terribly precarious place to be given the risks out there.”
The letters AI, which stands for “artificial intelligence,” stand at the Amazon Web Services booth at the Hannover Messe industrial trade fair in Hannover, Germany, on March 31, 2025.
Amazon said Wednesday that its cloud division has developed hardware to cool down next-generation Nvidia graphics processing units that are used for artificial intelligence workloads.
Nvidia’s GPUs, which have powered the generative AI boom, require massive amounts of energy. That means companies using the processors need additional equipment to cool them down.
Amazon considered erecting data centers that could accommodate widespread liquid cooling to make the most of these power-hungry Nvidia GPUs. But that process would have taken too long, and commercially available equipment wouldn’t have worked, Dave Brown, vice president of compute and machine learning services at Amazon Web Services, said in a video posted to YouTube.
“They would take up too much data center floor space or increase water usage substantially,” Brown said. “And while some of these solutions could work for lower volumes at other providers, they simply wouldn’t be enough liquid-cooling capacity to support our scale.”
Rather, Amazon engineers conceived of the In-Row Heat Exchanger, or IRHX, that can be plugged into existing and new data centers. More traditional air cooling was sufficient for previous generations of Nvidia chips.
Customers can now access the AWS service as computing instances that go by the name P6e, Brown wrote in a blog post. The new systems accompany Nvidia’s design for dense computing power. Nvidia’s GB200 NVL72 packs a single rack with 72 Nvidia Blackwell GPUs that are wired together to train and run large AI models.
Computing clusters based on Nvidia’s GB200 NVL72 have previously been available through Microsoft or CoreWeave. AWS is the world’s largest supplier of cloud infrastructure.
Amazon has rolled out its own infrastructure hardware in the past. The company has custom chips for general-purpose computing and for AI, and designed its own storage servers and networking routers. In running homegrown hardware, Amazon depends less on third-party suppliers, which can benefit the company’s bottom line. In the first quarter, AWS delivered the widest operating margin since at least 2014, and the unit is responsible for most of Amazon’s net income.
Microsoft, the second largest cloud provider, has followed Amazon’s lead and made strides in chip development. In 2023, the company designed its own systems called Sidekicks to cool the Maia AI chips it developed.
The logo of the cryptocurrency Bitcoin can be seen on a coin in front of a Bitcoin chart.
Silas Stein | Picture Alliance | Getty Images
Bitcoin hit a fresh record on Wednesday afternoon as an Nvidia-led rally in equities helped push the price of the cryptocurrency higher into the stock market close.
The price of bitcoin was last up 1.9%, trading at $110,947.49, according to Coin Metrics. Just before 4:00 p.m. ET, it hit a high of $112,052.24, surpassing its May 22 record of $111,999.
The flagship cryptocurrency has been trading in a tight range for several weeks despite billions of dollars flowing into bitcoin exchange traded funds. Bitcoin purchases by public companies outpaced ETF inflows in the second quarter. Still, bitcoin is up just 2% in the past month.
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Bitcoin climbs above $112,000
On Wednesday, tech stocks rallied as Nvidia became the first company to briefly touch $4 trillion in market capitalization. In the same session, investors appeared to shrug off the latest tariff developments from President Donald Trump. The tech-heavy Nasdaq Composite notched a record close.
While institutions broadly have embraced bitcoin’s “digital gold” narrative, it is still a risk asset that rises and falls alongside stocks depending on what’s driving investor sentiment. When the market is in risk-on mode and investors buy growth-oriented assets like tech stocks, bitcoin and crypto tend to rally with them.
Investors have been expecting bitcoin to reach new records in the second half of the year as corporate treasuries accelerate their bitcoin buying sprees and Congress gets closer to passing crypto legislation.
Don’t miss these cryptocurrency insights from CNBC Pro:
Perplexity AI on Wednesday launched a new artificial intelligence-powered web browser called Comet in the startup’s latest effort to compete in the consumer internet market against companies like Google and Microsoft.
Comet will allow users to connect with enterprise applications like Slack and ask complex questions via voice and text, according to a brief demo video Perplexity released on Wednesday.
The browser is available to Perplexity Max subscribers, and the company said invite-only access will roll out to a waitlist over the summer. Perplexity Max costs users $200 per month.
“We built Comet to let the internet do what it has been begging to do: to amplify our intelligence,” Perplexity wrote in a blog post on Wednesday.
Perplexity is best known for its AI-powered search engine that gives users simple answers to questions and links out to the original source material on the web. After the company was accused of plagiarizing content from media outlets, it launched a revenue-sharing model with publishers last year.
In May, Perplexity was in late-stage talks to raise $500 million at a $14 billion valuation, a source familiar confirmed to CNBC. The startup was also approached by Meta earlier this year about a potential acquisition, but the companies did not finalize a deal.
“We will continue to launch new features and functionality for Comet, improve experiences based on your feedback, and focus relentlessly–as we always have–on building accurate and trustworthy AI that fuels human curiosity,” Perplexity said Wednesday.