Short Description
Stocks diverge as AI reshapes the market. Winners like Equinix and Nvidia soar, while laggards like Cisco and AppLovin face pressures amid sector rotation.
Read Time: 2 minutes, 10 seconds
Main Article
Wall Street’s AI narrative is forcing a stark divide, as Thursday’s mixed trading reveals a deepening chasm between the technology sector’s winners and losers. The S&P 500 hovered near its record high amid this selective rally. Powered by soaring demand for AI infrastructure, data center operator Equinix skyrocketed over 11% on a bullish long-term forecast, while AI juggernaut Nvidia continued its ascent, providing the single largest lift to the benchmark index. This split highlights a critical stock market split, where capital is rapidly flowing toward perceived AI enablers.
Conversely, companies facing AI-driven disruption are feeling the pressure. AppLovin tumbled over 15% despite a solid earnings beat, extending its 2024 losses on fears of AI-powered competition. Tech giant Cisco Systems plunged nearly 10% after its profit margin forecast disappointed analysts, suggesting higher costs for components like computer memory due to artificial intelligence demand. These moves underscore rising investor questions about whether corporate AI investments will yield sufficient returns, creating pockets of volatility within the broader sector rally.
Beyond tech, economic data provided a nuanced backdrop. A slight uptick in jobless claims nudged Treasury yields lower, but the data follows a surprisingly strong jobs report, keeping the Federal Reserve’s rate-cut timeline uncertain. All eyes now turn to Friday’s key Consumer Price Index report for the latest clues on inflation. Overseas, optimism propelled South Korea’s tech-heavy Kospi up more than 3%, while European indexes also posted solid gains, reflecting the global resonance of the AI investment theme.
Short Summary
U.S. stocks are diverging sharply as the AI boom creates clear winners, like Equinix and Nvidia, and losers facing competitive or cost pressures. The mixed trading underscores a sector rotation driven by AI investment bets, with broader market direction hinging on upcoming inflation data and Treasury yield movements. This split defines the current market landscape.
