The stock market is looking chipper again as bond yields slide on hopes the Federal Reserve is done raising interest rates. A well-received earnings report from Apple after Thursday’s closing bell could reinforce the latest rally in big tech stocks.
“It is true that tech has somewhat decoupled from the broader market this year, but it is less clear that AI had a major role in this,” they say, and provide the chart below that shows a measure of abnormal returns for the tech sector compared with the rest of the market. Another way to observe AI’s waning influence on the market is to split out semiconductor stocks from software and services firms. The chart below shows an initial jump in semiconductor stocks — mainly driven by Nvidia –after ChatGPT’s launch in November last year.
The mentions of AI-related words in company documents have sharply accelerated this year as management try to pitch revenue and/or cost benefits from the technology, they note. “Indeed, beyond a handful of stocks, there have been few clear winners or losers from the buzz around generative AI. At present, some of the major non-semiconductor players are still figuring out the product,” they conclude.
Shares of Roku Inc. ROKU, +0.22% are jumping nearly 20% in Thursday’s premarket trading after the company easily topped revenue expectations for the third quarter and noted “a solid rebound in video ads.”
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