Stocks Hit New Highs on AI’s Promise – Weekly Update

February 26, 2024 | By Steven DiGregorio

Stocks vaulted to new heights last week on the back of an artificial intelligence (AI) semiconductor company, marking investors’ belief that AI has the potential to transform the U.S. economy.

Stocks Rally to Record Highs

Stocks traded in a fairly tight range for the first half of the short week, yawning at the lack of economic data while awaiting earnings results from one key company that creates chips that power the artificial intelligence operations of many firms.

A strong Q4 corporate report and long-term message from Nvidia Corp. pushed the S&P 500 and Nasdaq to new closing highs on Thursday.

Nvidia’s market cap rose by $277 billion on the news, pushing it to a $2 trillion valuation. To put that in perspective, Nvidia’s market cap is now roughly the same size as Canada’s economy. Its 16% gain on Thursday was the largest one-day market cap increase by any U.S. company.1,2

Remember, companies mentioned are for illustrative purposes only. It should not be considered a solicitation for the purchase or sale of any company connected with AI.

Inflection Point?

Nvidia’s seismic increase in market cap gave investors pause for reflection, wondering whether this marked an inflection point for artificial intelligence.

The main story that investors took away was that, because of its market dominance as the leading global provider of AI computer chips, Nvidia served as a proxy for AI. Some of the world’s most influential companies rely on Nvidia technology to power their own AI initiatives. Investors appear to have concluded that AI’s impact may just be starting, and anticipate it will be a driving economic force in 2024 and beyond.3,4

This Week: Key Economic Data

Monday: New Home Sales. Two-year Treasury Note Auction.
Tuesday: Durable Goods. Case-Shiller Home Price Index. Consumer Confidence.
Wednesday: GDP report (second estimate). Petroleum Status Report.
Thursday: Jobless Claims. Personal Income and Outlays.

Source: Investors Business Daily – Econoday economic calendar; February 19, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Monday: Workday, Inc. (WDAY), Zoom Video Communications, Inc. (ZM)
Tuesday: Dell Technologies Inc. (DELL), Agilent Technologies, Inc. (A), eBay Inc. (EBAY)
Wednesday: Salesforce Inc. (CRM), HP Inc. (HPQ)
Thursday: Hewlett Packard Enterprise Company (HPE)

Source: Zacks, February 19, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

Box upload

Source: YCharts.com, February 24, 2024. Weekly performance is measured from Friday, February 16 to Friday, February 23.
ROC 5 = the rate of change in the index for the previous 5 trading days.
TR = total return for the index, which includes any dividends as well as any other cash distributions during the period.
Treasury note yield is expressed in basis points.

Footnotes and Sources

1. MarketWatch.com, February 22, 2024.
2. US News & World Report, February 22, 2024.
3. CNBC, February 21, 2024.
4. The Wall Street Journal, February 22, 2024.


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Tags: #CompassAMG, AI, DJIA, Inflation, NASDAQ, Record Highs, S&P 500

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STEVEN M DIGREGORIO is President of Compass Asset Management Group, LLC and an Investment Advisor Representative with Spire Wealth Management, LLC.
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