The Nasdaq Composite continued its impressive run yesterday, climbing 1.52% to close at 21,451.6 points - its third consecutive record high. The index has now gained nearly 7% in July alone, outpacing both the S&P 500 and Dow Jones Industrial Average by a comfortable margin.
What's driving this surge? In a word: AI. Or more specifically, strong earnings from companies positioned to benefit from the artificial intelligence revolution.
Nvidia led the charge again, jumping 3.8% after Bank of America raised its price target to $1,500 (from an already lofty $1,300). The semiconductor giant has become the poster child for AI investing, and its momentum shows no signs of slowing.
But it's not just Nvidia. The successful Figma IPO (which I covered earlier) has reinvigorated interest in growth-oriented tech stocks broadly. Companies like ServiceNow and MongoDB also posted strong gains yesterday on no specific news - just the rising tide of tech enthusiasm lifting all boats.
"We're seeing a rotation back into higher-growth tech names," explained Marcus Thompson, chief market strategist at Meridian Capital. "The Figma IPO success is a symptom, not a cause - it reflects growing confidence that we're entering a new phase of tech-driven growth."
I think investors are increasingly distinguishing between AI winners and AI pretenders. The former continue to attract premium valuations, while the latter are being subjected to much more scrutiny than they were six months ago.
