Technology stocks linked to artificial intelligence staged a recovery in late trading Monday, spearheaded by a significant rally in Oracle shares. The software giant's stock advanced 9.8% to $156.59 after analysts at D.A. Davidson upgraded the company to a buy rating.
Broad-Based Tech Gains
The positive sentiment spread across the sector. Nvidia rose 2.4%, while Advanced Micro Devices gained 3.6% and Broadcom added 3.3%. Microsoft shares also moved higher, climbing about 3.1%. The rally helped lift major indices, with the S&P 500 closing up 0.47% and the Nasdaq Composite gaining 0.88%. The Dow Jones Industrial Average finished essentially flat, edging up just 0.03%.
Despite the rebound, underlying concerns persist regarding the profitability of massive AI infrastructure investments. Market strategists note lingering questions about how cloud service providers will translate soaring capital expenditures into sustainable earnings. Options market activity suggests continued investor caution, with implied volatility for a major software ETF remaining elevated.
Economic Calendar in Focus
Trader attention is now shifting to upcoming economic indicators that could influence Federal Reserve policy. The delayed January payrolls report is scheduled for release Wednesday, followed by the Consumer Price Index data on Friday. These readings will provide critical signals on the path of interest rates.
The next significant catalyst for the AI trade is expected to be Nvidia's quarterly earnings report, scheduled for February 25. Investors will scrutinize the results for clear evidence that the wave of AI-related spending is generating durable revenue growth for the chipmaker and its peers.
