Tech stocks soared Wednesday morning after a better-than-expected inflation report injected the market with a little optimism and extended yesterday’s AI stock rebound.
Shares of Tesla (TSLA) were up 7% in recent trading, leading the Magnificent Seven stocks higher. AI chip maker Nvidia’s (NVDA) stock jumped 6%, while Meta (META) advanced 3%. Amazon (AMZN) rose about 1%, while Alphabet (GOOG), Microsoft (MSFT), and Apple (AAPL) were marginally higher.
AI stocks were among the market’s best-performing stocks on Wednesday morning. AI favorite Applovin (APP), shares of which rose more than 700% last year and tumbled about 50% in recent weeks, was up about 6%. Palantir (PLTR), the S&P 500’s best-performing stock last year, gained 5%. Nuclear power providers Vistra (VST) and Constellation Energy (CEG), shares of which soared last year on AI-driven demand for low-carbon electricity, advanced 5% and 3.5%, respectively.
AI stocks have been hit particularly hard in recent weeks by President Trump’s tariff policies and the economic uncertainty they’ve engendered. The Magnificent Seven entered a technical correction in late February as worries mounted about AI competition from China, overspending on AI infrastructure, and slowing growth at bellwether Nvidia. Since then, the stocks have fallen further amid concerns that tariffs threaten to slow economic growth and accelerate inflation.
Some analysts have expressed confidence that the fundamentals underlying the AI rally remain intact and that the recent sell-off presents investors with an attractive buying opportunity. Others have urged caution, noting the sell-off had plunged the major indexes below key support thresholds, a possible sign of more pain ahead.