NEW YORK: The Dow and the S&P 500 scaled fresh record highs on Tuesday as strong results from Hewlett Packard Enterprise and a funding commitment from Alphabet reinforced confidence in the AI buildout.
HPE surged about 26 percent, on track for a record one-day percentage gain, after the AI server maker pulled forward its long-term financial targets by two years. Peer Super Micro Computer climbed 6 percent, while chipmakers gained 5 percent.
Alphabet said it was looking to raise USD80 billion in equity offerings, including an investment from Berkshire Hathaway, to fund a costly expansion of its AI infrastructure.
While Alphabet’s stock itself slipped nearly 2.5 percent, dragging down the communications services index almost 1.5 percent, the news fanned optimism around AI infrastructure spend.
“It confirms the insatiable demand that we’re seeing really across the board for AI. Every day it seems like a different company comes out with incredible signs that this wave of AI is alive and well,” said Ryan Detrick, chief market strategist at Carson Group.
The S&P 500 and the Nasdaq logged their eighth straight session of gains on Monday and closed at record levels after Nvidia unveiled a new processor to bring AI to personal computers.
Marvell Technology’s shares surged more than 26 percent to over USD240 billion in market value after Nvidia Chief Executive Officer Jensen Huang called the chipmaker the next “trillion dollar company” at the Computex conference in Taipei.
Nvidia invested USD2 billion in Marvell in March. At 11:26 a.m. ET, the Dow Jones Industrial Average rose 155.84 points, or 0.31 percent, to 51,234.72, the S&P 500 gained 17.47 points, or 0.23 percent, to 7,617.43 and the Nasdaq Composite gained 73.42 points, or 0.27 percent, to 27,160.23.
Seven out of 11 major S&P 500 indexes were in the green, with utilities advancing the most.
The software index dropped 3.7 percent as a recovery rally stalled following a 14 percent surge in the last three sessions. ServiceNow, Salesforce and Intuit were down between 6 percent and 10 percent. Microsoft dropped 3.7 percent.
Microchip Technology advanced 6 percent after an upbeat data center revenue forecast.
Upbeat first-quarter results and AI enthusiasm have driven the rally on Wall Street, with hopes for an end to the US-Iran conflict and a reopening of the Strait of Hormuz adding support.
But recent flare-ups in tensions have raised concerns that a prolonged conflict could stoke inflation, push the Federal Reserve toward tighter policy and threaten Wall Street’s record run.
US Secretary of State Marco Rubio told lawmakers that Iran had agreed to negotiate aspects of its nuclear program that it previously refused to discuss.
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