Fervo Energy made a remarkable entrance on the Nasdaq, with shares soaring 33% in its first day of trading. The Houston-based geothermal company raised $1.89 billion through an upsized initial public offering, pricing 70 million shares at $27 each, above the marketed range. The stock opened at $36, pushing the company's market valuation to $10.21 billion.
Investors continued to chase stocks tied to artificial intelligence infrastructure, undeterred by fresh inflation data that dampened rate-cut expectations. The S&P 500 and Nasdaq Composite edged higher, lifted by gains in chipmakers and tech megacaps, while the Dow Jones Industrial Average lagged.
Producer prices surged 1.4% in April, the largest monthly increase in four years, according to Reuters. Year-over-year, the Producer Price Index rose 6.0%, signaling persistent pricing pressures. Following the data, expectations for Federal Reserve rate cuts in 2026 diminished sharply. On Polymarket, traders assigned a 69% probability to no rate cuts in 2026, while Kalshi's Fed markets showed a 63% bet on exactly zero cuts.
Nebius Group jumped 18.7% to $212.65 after reporting first-quarter revenue of $399 million, a staggering 684% year-over-year increase. The AI cloud firm also announced it secured up to 1.2 gigawatts of power and land for a planned Pennsylvania AI factory, a data-center complex for training and running AI models.
Ford Motor Company surged 15.6% to $13.87 as investors focused on its new battery-storage division, Ford Energy, which targets utilities, data centers, and industrial users. Morgan Stanley, as reported by Barron's, called the unit undervalued and highlighted Ford as the standout among automakers, outperforming General Motors, Stellantis, and Tesla.
The AI infrastructure rally also lifted Akamai Technologies, Wolfspeed, and Coherent. Akamai shares rose approximately 10.2% after Bank of America analyst Tal Liani upgraded the stock to Buy, citing a new cloud-infrastructure agreement with Anthropic. Wolfspeed surged about 18.8% following a positive mention from Citrini Research, which called it a key power-chip beneficiary of growing data-center demand. Coherent gained around 8.5%.
In the semiconductor space, Micron Technology added roughly 5.3%, and Nvidia advanced 2.6%. Chinese e-commerce giant Alibaba saw its U.S.-listed shares jump 8.8% after reporting a 38% increase in cloud revenue, with executives asserting that AI investments are paying off despite softer profits.
On the downside, Wix.com plunged 25.7% to $56.35, the steepest drop among major stocks in focus. First-quarter bookings of $585 million and revenue of $541 million both exceeded year-ago figures, but investors zeroed in on rising spending tied to AI and new products. CEO Avishai Abrahami told analysts he remains confident in Wix's market positioning.
Dynatrace fell roughly 11.7% despite topping earnings and revenue estimates for its fiscal fourth quarter. Traders focused on annual recurring revenue figures and a mixed outlook for fiscal 2027, underscoring that clear guidance remains critical for software companies as AI spending consumes capital.
Analysts warned that AI and power stocks fueling recent gains could face headwinds if inflation keeps rates elevated or if companies cannot pass on higher costs. Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest Wealth Management, flagged the risk of margin compression when producer prices run hot. Jim Baird, chief investment officer at Plante Moran Financial Advisors, noted investors are balancing strong earnings against the threat of inflation.
For now, investors continue to favor companies with direct ties to AI compute, grid power, or data-center capacity. On Wednesday, that preference was evident as stocks linked to geothermal power, AI cloud, and battery storage attracted buyers, while software firms facing cost scrutiny were passed over.
