NEW YORK — A senior earnings analyst advised investors to stay with the AI trade and overweight technology stocks, pushing back against growing speculation that valuations in the sector represent an unsustainable bubble.
The analyst's case rests on demand for AI infrastructure. Companies continue to invest heavily in data centers, driving revenue for chipmakers and cloud providers. Nvidia, trading at $206.84 and down 0.9 percent on the day, remains the clearest expression of that spending.
Beyond core AI hardware, software and consumer technology also show strength. Apple rose 3.5 percent to $333.02 as the company prepares for new AI-integrated device cycles. Microsoft, flat at $381.70, holds its lead in enterprise cloud services—a critical component for broad AI adoption.
The Nasdaq closed down 0.6 percent at 24,976, reflecting some caution in the broader market. The analyst said strong earnings growth in key tech segments provides a fundamental anchor, distinguishing current conditions from past speculative periods.
Alphabet gained 0.6 percent to $319.74 and Amazon fell 0.7 percent to $232.11, with both companies using AI to expand advertising, cloud and e-commerce revenue.
Catalysts for continued outperformance include expanding AI application development, rising enterprise spending on digital transformation and the rollout of next-generation AI hardware—each supporting revenue expansion that, in the analyst's view, justifies current valuations.
