Nvidia’s surge to a new all-time high on Thursday briefly pushed the S&P 500 into uncharted territory, leaving investors wondering what the future holds for the artificial intelligence sector. At one point, the chipmaker’s shares rose as much as 3.8% in Thursday’s trading session, reaching above $140. This marked the first new intraday high for Nvidia since June. The company seemed to benefit from the positive sentiment surrounding Taiwan Semiconductor, which surged nearly 10% after beating Wall Street’s third-quarter earnings expectations. The S&P 500 index also hit a record high during the day, driven mainly by strong performances from semiconductor and financial stocks. Nvidia’s stock, which reached an all-time closing high on Monday, has gained 1.6% so far this week. The recent rally in Nvidia highlighted a return to bullish sentiment after concerns earlier this year that AI stocks had become overvalued. Nvidia’s shares had declined in April and July as investors questioned whether there was too much hype surrounding AI, according to Tom Martin, a senior portfolio manager at Globalt Investments. “People were saying, ‘You can’t keep growing indefinitely, so let’s be more cautious in our investments,'” Martin explained. However, AI-focused companies are now indicating that there is strong and lasting demand for their products. Martin is optimistic about the future of the AI sector, especially as the year-end approaches, which is typically a strong period for the market. He believes that Nvidia, in particular, has solid fundamental drivers that could continue to push its stock price higher. However, he warns that the journey may not be smooth sailing. On a broader scale, Martin believes that AI investment can help sustain the global economy at a time when other sectors, such as China and automobile sales, are showing signs of weakness. “We want to have exposure to this stock. We want to be overweight in it,” Martin said of Nvidia. However, he anticipates some volatility as investors may consider the stock to be overvalued at times and try to take profits, only to buy back in when the price dips and starts to rise again.
