© Reuters. FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 27, 2023. REUTERS/Brendan McDermid/File Photo

The Nasdaq Closes Sharply Higher Boosted by Alphabet and AMD

By Noel Randewich and Shristi Achar A

(Reuters) – The Nasdaq ended sharply higher on Thursday after Alphabet (NASDAQ:) and Advanced Micro Devices (NASDAQ:) sparked a megacap rally on fresh optimism about artificial intelligence.

Shares of Alphabet jumped 5.3% as analysts cheered the launch of the Google-parent’s newest AI model, while AMD soared nearly 10% after the company estimated the potential market for its data center AI chips could reach $45 billion this year.

Other heavyweight tech-related stocks also gained, with Nvidia (NASDAQ:) and Meta Platforms (NASDAQ:) rising over 2%, Amazon (NASDAQ:) up 1.6% and Apple (NASDAQ:) 1% higher.

The Philadelphia semiconductor index jumped 2.8%, increasing its 2023 gain to 48%, much of that fueled by bets about the future of AI.

“Today it’s an AMD-Google rally. There’s a contagion effect across the market. Everyone wants to get on the bandwagon,” said Jay Hatfield, CEO of Infrastructure Capital Management in New York.

“We’re kind of in this weird market, a tag-team market, where one day tech leads, and then the next day value and the broad market lead.”

The S&P 500 climbed 0.80% to end the session at 4,585.59 points, with 1.8 stocks in the index gaining for each one that fell.

The most traded stock in the S&P 500 was Tesla (NASDAQ:), with $25.7 billion worth of shares changing hands during the session. The shares rose 1.37%.

The jumped 1.37% to 14,339.99 points, while rose 0.18% to 36,117.57 points.

Traders have almost fully priced in the likelihood of the Fed keeping rates unchanged at its meeting next week.

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