--- title: "AI trading optimism returns strongly: NVIDIA breaks through the $500 billion mark, Wall Street sounds the horn for increased infrastructure allocation" type: "News" locale: "en" url: "https://longbridge.com/en/news/284148834.md" description: "The optimism surrounding AI trading has returned, with the S&P 500 and Nasdaq indices reaching all-time highs. NVIDIA's market value has surpassed $500 billion, and Intel recorded its largest single-day gain since 1987. Investors are focusing on the demand for AI infrastructure, with expectations that hyperscale cloud companies will invest $650 billion. Analysts indicate that the AI boom makes it difficult to judge the semiconductor industry's cycle, which is still in its early stages. Intel's performance also has a positive impact on AMD's earnings report expectations" datetime: "2026-04-27T03:47:04.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284148834.md) - [en](https://longbridge.com/en/news/284148834.md) - [zh-HK](https://longbridge.com/zh-HK/news/284148834.md) --- # AI trading optimism returns strongly: NVIDIA breaks through the $500 billion mark, Wall Street sounds the horn for increased infrastructure allocation The Zhitong Finance APP noted that the S&P 500 Index and the Nasdaq Composite Index are at historical highs, and the rapid rise of chip stocks has reignited the AI trading frenzy. Last Friday, NVIDIA (NVDA.US) surpassed a market capitalization of $5 trillion, while Intel (INTC.US) recorded its strongest single-day gain since 1987. This frenzy reflects investors' increasing focus on the infrastructure required to run "agent AI," which is a model where robots or agents perform tasks on behalf of users. The usage of such applications has exploded, driving up demand for central processing units (CPUs)—such as those produced by Intel. The Philadelphia Semiconductor Index extended its winning streak to 18 consecutive trading days last Friday. Cody Acree, a senior semiconductor research analyst at Benchmark, stated in an interview, "We have just returned to the optimistic sentiment surrounding AI trading." He added, "I believe the optimistic expectations for demand are correct. Demand, spending, and capital expenditure budgets are all very real." Hyperscale cloud computing giants are expected to invest about $650 billion in AI infrastructure this year, and there is currently little indication of when this investment pace will begin to slow. Although the semiconductor industry has historically been cyclical, the speed of the AI boom makes it difficult to accurately determine when the cycle will peak and when growth will begin to slow. "We are just at the starting point of the 'inference' phase. This phenomenon only emerged in the middle of last year—so it is still in the early stages," said Matt Bryson, a stock analyst at Wedbush Securities. The phase he refers to is the application of trained AI models to predict outcomes or respond to user prompts. Intel's performance is also a good omen for its peer AMD (AMD.US), which will release its earnings report next month. "We once thought CPUs were the next huge bottleneck, but Intel's results indicate that this has translated into very substantial growth opportunities," said **D.A. Davidson analyst Gil Luria, who upgraded AMD's rating to "buy" last Friday.** Strategists pointed out that every link in the AI infrastructure chain has attracted funding, from processors to connectivity solutions. "Any company related to AI that serves bottleneck demands, whether in computing, memory, or connectivity," said Acree of Benchmark, "you can buy a basket of these companies, and they will all perform very well." As the market focus remains on earnings reports, the stock market has ignored the uncertainties brought about by the Iran war and persistently high oil prices around $100. **Goldman Sachs strategist Ben Snider believes the S&P 500 Index will rise to 7,600 points by the end of the year.** "Against the backdrop of sustained profit growth, the U.S. stock market should continue to hit new highs in the coming months," Snider wrote last week. The strategist suggested holding onto participants that can benefit from AI trading. He added, "In the stock market, we believe investors should tilt their portfolios towards long-term growth companies with unique profit drivers and limited risk of AI disruption—such as companies related to power infrastructure investment—rather than those tied to broad economic growth." GE Vernova (GEV.US) reached a historic high last week, following strong performance driven primarily by significant market demand for its gas turbines and electrification services. ## AI Spending Concerns Of course, risks remain. While tech giants hold market dominance, they are not completely immune to macroeconomic issues. Additionally, disappointment related to AI costs could undermine this rally. Earlier this year, higher-than-expected capital expenditures unsettled investors, causing the "seven giants" stocks to slump, with a 16% drop in the first three months of 2026, more than double the decline of the S&P 500. Aggregate data shows that the combined capital expenditures of Microsoft, Alphabet, Amazon, and Meta are expected to reach $649 billion in 2026, up from $411 billion in 2025. Brian Barbetta, co-head of the technology team at Wellington Management and manager of the Global Innovation Strategy fund with approximately $50 billion in assets, stated that these companies need to prove that this spending will yield strong returns. Barbetta said, "We believe that the capital invested has a strong return on investment (ROI) and will lead to faster growth and margin expansion over time." However, the scale of investment is negatively impacting cash flow. Amazon's free cash flow is expected to be negative $13.3 billion in the first quarter, marking the largest loss since 2022 when it made aggressive investments in warehouses to meet pandemic-driven demand. Meta's free cash flow is expected to be $4 billion in the first quarter, the lowest level in nearly four years. In response, some companies are cutting back on spending. Meta and Microsoft plan to lay off employees to help offset the impact of larger AI expenditures. News of these measures on Thursday led to declines in both companies' stock prices. Investors may closely monitor these companies' cloud computing businesses, as demand from AI startups like Anthropic and OpenAI is driving rapid sales growth, even leading to supply shortages. The largest cloud service provider, Amazon AWS, is expected to see a 26% increase in revenue in the first quarter, while Microsoft Azure and Google Cloud's sales are expected to grow by 38% and 50%, respectively. Last quarter, Azure's 38% revenue growth failed to meet investor expectations, causing Microsoft's stock to drop 10% the day after its earnings report Allen Bond, the portfolio manager at Jensen Investment Management, believes that the excitement over Anthropic's new AI service has alleviated many concerns about whether such investments can ultimately yield returns. He added that while these advancements have made some software manufacturers, considered at risk of disruption, anxious, it is a positive development for large tech companies that are actively investing for the future. "These companies have extremely strong businesses, high profit margins, and good stability, and their price-to-earnings ratios do not appear to be overly stretched," Bond said. 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