Stock Market Today: Tech Stocks Soar as AMD, Alphabet Rally
AI-related headlines sparked a major surge in tech stocks Thursday, with the Nasdaq handily outperforming its peers.
Stocks closed higher Thursday thanks to a big rally in the technology sector. Advanced Micro Devices (AMD, +9.9%) was one of the biggest gainers after the chipmaker unveiled its new artificial intelligence (AI) chips that are expected to provide a major boost to its top line.
Specifically, AMD said it anticipates these new AI chips to add $400 million to fourth-quarter revenue and more than $2 billion in its upcoming fiscal year. Additionally, Advanced Micro Devices CEO Lisa Su said the market for AI chips in data centers could hit $400 billion by 2027. This is well above other forecasts. Research firm Gartner, for instance, predicts global revenue from AI chips to reach $119 billion by 2027.
"We think part of what makes a good stock is the ability to dream – and this certainly fits the bill as AMD is still a fairly small company in very large markets," says UBS Global Research analyst Timothy Arcuri. "The stock remains one of our top ideas heading into 2024 and we reiterate our Buy."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Alphabet adds nearly $90 billion in market cap on Gemini reveal
AMD wasn't the only tech stock rallying on AI news today. Alphabet (GOOGL) surged 5.3% – adding $88 billion in market cap along the way – after the tech giant's subsidiary Google unveiled Gemini, its new AI model. "Google has been under pressure to catch up with OpenAI's ChatGPT and its advanced AI capabilities," writes Tech Radar's Alex Blake, adding that Gemini is Google's "most powerful AI brain so far."
CFRA Research analyst Angelo Zino (Buy) says that while he believes Google "may still be a step behind Microsoft/OpenAI, AI advancements are moving incredibly fast."
Alphabet is one of the Magnificent 7 stocks, a group that includes Amazon.com (AMZN, +1.6%), Meta Platforms (META, +2.9%), Microsoft (MSFT, +0.6%), Nvidia (NVDA, +2.4%) and Tesla (TSLA, +1.4%). Massive gains this year for the mega-cap tech stocks have helped the market cap-weighted S&P 500 (+19.4% for the year-to-date) and Nasdaq Composite (+36.9%) deliver outsized returns compared to the price-weighted Dow Jones Industrial Average (+8.9%).
As for today's action, the S&P 500 rose 0.8% to 4,585, while the Nasdaq jumped 1.4% to 14,339. The Dow, on the other hand, added a more modest 0.2% to end at 36,117.
Jobs report is up next
Looking ahead, all eyes are on tomorrow's November jobs report. This morning, data from the Labor Department showed initial jobless claims edged up by 1,000 last week to 220,000.
"Tomorrow's jobs report is likely to provide additional indications of the labor market softening, a welcome sign for employers who have faced challenges with wage pressures and staffing with the right candidates," says José Torres, senior economist at Interactive Brokers. "Its impact on markets, however, will depend on whether investors view the data as a stepping stone to a March rate cut and soft landing, or an adverse effect on consumer spending and a sharper economic slowdown."
Related content
- Will SCOTUS Strike Down Wealth Taxes?
- The Earnings Recession Is Over
- Amazon vs Walmart: Who Has the Cheapest Grocery Prices?
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Five Tax-Savvy Ways To Donate This Holiday Season
Charitable Donations Food pantries, toy drives, and animal sanctuaries are popular ways to support others year-round.
By Gabriella Cruz-Martínez Published
-
A Checklist for Retiring in 2025
Navigating the final stretch of your professional career can be daunting. We've compiled a checklist to help you put your best foot forward into retirement.
By Alina Tugend Published
-
Stock Market Today: Tech Stocks Rally as CPI Supports Lower Rates
An inline inflation report sealed the deal for a December rate cut and sent the tech sector soaring.
By Dan Burrows Published
-
Stock Market Today: Stocks Shrink From Highs as CPI Looms
The Nasdaq hit a new record early Tuesday but drifted lower into the closing bell.
By David Dittman Published
-
Alphabet Stock Jumps on Google's Quantum Computing Chip
Google's parent company, Alphabet, is up Tuesday after the company unveiled Willow, its new chip that powers quantum computing. Here's what you need to know.
By Joey Solitro Published
-
Stock Market Today: Markets Reflect Global Uncertainty
Exuberance fades as investors confront micro challenges and a murkier macro environment.
By David Dittman Published
-
Stock Market Today: Nasdaq Nabs New High After Jobs Data
The S&P 500 also closed at its highest level ever, while the Dow Jones Industrial Average was pressured by another down day for UnitedHealth stock.
By Karee Venema Published
-
Rebound in Jobs Growth Keeps Fed on Track: What the Experts Are Saying
Jobs Report No nasty surprises in the November payrolls data leaves a quarter-point cut in play.
By Dan Burrows Published
-
Stock Market Today: Stocks Pause Near Highs Ahead of Jobs Friday
Investors await a key data set with sentiment still broadly positive.
By David Dittman Published
-
Stock Market Today: Stocks Rally as Econ News Affirms Rate-Cut Bets
Some soft economic data was good news for rate cuts and risk assets.
By Dan Burrows Published