Shares of semiconductor companies focused on artificial intelligence powered higher at the end of last week, with Nvidia climbing 7.9% to $185.41 and Advanced Micro Devices advancing 8.2% to $208.44. The rally coincided with the Dow Jones Industrial Average closing above the 50,000 mark for the first time.
Spending Divide Drives Market Moves
The surge followed revelations of substantial capital expenditure plans from major technology firms, with projections indicating approximately $600 billion could be allocated toward AI infrastructure in 2026. Amazon, despite forecasting a more than 50% increase in its capital spending this year to around $200 billion, saw its shares decline 5.6% to $210.32. This divergence highlights investor scrutiny between companies supplying critical AI hardware and those funding expansive build-outs.
"The market is drawing a harder line between the pick-and-shovel providers and the companies writing the checks," noted one market observer. This sentiment was echoed by Andrew Wells of SanJac Alpha, who suggested the AI investment theme had become "too pricey" and required a "de-risking" phase.
Upcoming Catalysts: Inflation and Earnings
Investor attention now turns to two key events. The U.S. Consumer Price Index report for January, scheduled for release on February 13, will serve as a crucial gauge of inflation and could influence interest rate expectations that heavily impact growth-oriented technology stocks.
More directly for the sector, Nvidia is set to report its fourth-quarter results on February 25. Market participants will closely analyze the company's outlook for signals on data-center demand and whether the projected wave of capital expenditure is translating into concrete orders. Nvidia CEO Jensen Huang recently described demand as "sky-high" and characterized the spending increase as "appropriate and sustainable."
Despite the weekly advance for chipmakers, the Nasdaq Composite still finished the week down 1.9%, reflecting broader market volatility. As trading resumes, the sustainability of Friday's rebound in AI-related names will be tested against evolving assessments of corporate budgets and macroeconomic conditions.
