(May 14): US equities rose as the artificial intelligence trade continued to drive gains across technology shares, powered by upbeat earnings from Cisco Systems Inc and an AI IPO.
The S&P 500 Index advanced 0.4% Thursday, while the Nasdaq 100 Index gained 0.6% as of 9:40am in New York. Cisco’s double digit rally sent shares to a record after the company delivered a better-than-anticipated sales forecast and announced plans to cut thousands of jobs to focus on the fast-growing AI market.
Also firing up risk appetites, Cerebras Systems Inc’s US initial public offering raised US$5.55 billion ($7.1 billion) as the AI chipmaker seized on the surging demand for semiconductors. The company priced its shares at US$185 each, above the marketed range.
“It is all about momentum now for the chip space and for many, that just means riding the wave,” said Todd Sohn, chief ETF strategist at Strategas Securities. “The tricky part is staying involved when volatility increases, as well as knowing how much exposure one has to these corners throughout a portfolio. Practically any measure of momentum reads as historically extreme.”
Elsewhere, US retail sales advanced for a third month in April, suggesting signs of consumer resilience despite sharply higher gas prices. The value of retail purchases increased 0.5% last month after a revised 1.6% gain in March, Commerce Department data showed Thursday. Because the figures aren’t adjusted for inflation, an increase could reflect higher prices rather than more sales volumes.
It’s “too early” to sell semiconductor stocks, according to Barclays Plc, global chairman of research Ajay Rajadhyaksha. “This is not 2000,” he wrote in a research note, pointing to real earnings, backlogs showing contractual demand and AI infrastructure building that has years to run.
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AI is no longer just fueling the S&P 500, it increasingly is the US equity benchmark, according to Bloomberg Intelligence strategists Nathaniel T Welnhofer and Christopher Cain. A BI basket of stocks tied to the AI theme comprised of 44 companies that represent roughly 45% of the index’s market capitalisation has generated most of the earnings growth since 2024 and margin expansion since 2022.
“The twist for bears: the rest of corporate America is finally waking up after two sluggish years,” the strategists wrote in a report. “If cyclical and non-AI sectors begin contributing while Nvidia Corp and AI complex keep minting earnings, 2026 could look less like a late-cycle slowdown and more like a replay of the 2021 post-pandemic profit boom.”
On the geopolitical front, President Donald Trump invited Chinese President Xi Jinping to visit the White House in September during his trip to China alongside US CEOs. Treasury Secretary Scott Bessent said the US and China are discussing a mechanism for fast-tracking some Chinese investment deals, along with a reduction in tariffs on a swath of non-critical goods as the world’s largest economies try to manage their rivalry.
See also: US stocks waver as oil prices edge lower; chips stocks mixed
In individual company news, Stubhub Holdings Inc jumped 19% after the ticketing company reported better-than-expected first-quarter results.
Uploaded by Magessan Varatharaja
