Tech stocks surge as wave of interest in AI drives $4tn rally

theguardian.com:

A rush of interest in artificial intelligence (AI) has helped to fuel a $4tn (£3.2tn) rally in technology stocks this year, with the US Nasdaq exchange reaching its highest level since last August in a week that saw the chipmaker Nvidia poised to become the next trillion-dollar company.

Some stocks seen as AI winners – such as semiconductor makers and software developers – have more than doubled in value as traders bet on massive growth in the industry, even as fears mount over waves of job losses as everyday tasks become automated.

On Friday, the combined value of technology companies listed on the Nasdaq Composite share index reached $22tn, according to the international data firm Refinitiv, up from $18tn at the end of 2022. The AI rally has helped lift the index 23% so far this year.

Nvidia, whose high-end chips are used to power the datacentres used by the new wave of generative AI products such as ChatGPT, could soon become the first chipmaker to be valued at more than $1tn. Its share price has risen by 160% during 2023, lifting its value from $361bn at the start of the year to over $940bn when Nasdaq reopened on Friday morning.

On Thursday Nvidia’s shares jumped by 24% during a wild session after it predicted soaring demand for its chips. Nvidia’s rally added almost $300bn to the value of stocks related to AI, Reuters calculated.

The term is almost as old as electronic computers themselves, coined in 1955 by a team including legendary Harvard computer scientist Marvin Minsky. With no strict definition of the phrase, and the lure of billions of dollars of funding for anyone who sprinkles AI into pitch documents, almost anything more complex than a calculator has been called artificial intelligence by someone.

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