The AI trade has re-emerged on the back of new strategies from Meta and Microsoft, with flows into AI-related stocks becoming active again ahead of Micron’s earnings.
The AI trade is seeing buying spread again against the backdrop of Meta Platforms and Microsoft rolling out new AI strategies. This has strengthened inflows into AI-related stocks, putting expectations for profit growth into focus ahead of Micron Technology’s earnings.
The US market has been moving through a period in which strong indexes coexist with weakness across the broader market. For the September week, the S&P 500 rose 1.2%, the NASDAQ 100 3.2% and the SOX 6.2%, highlighting the recovery in AI-related stocks. Long-term interest rates remained elevated in the 5% range, rising to 5.18%.
Meta has set out plans to expand the use and monetization of AI through the launch of Muse, while Microsoft is pursuing the same goals through a revamp of Copilot. The market has strengthened its view that broader use of existing AI could support demand even if the pace of development of new models slows.
Even amid concerns that development of cutting-edge models could be restrained, expectations have again been raised that the spread of AI could translate into profit growth and spill over into expanding demand for semiconductors and memory.