AI Frenzy Drives Stocks to Fresh Records as Cisco and NVIDIA Lead Rally

Wall Street extended its powerful rally on Thursday as sustained enthusiasm surrounding artificial intelligence pushed the S&P 500 and Nasdaq Composite to fresh record highs once again. Stronger participation across the broader market also helped the Dow Jones Industrial Average reclaim and close above the psychologically important 50,000 level.

The S&P 500 climbed 0.8%, while the Nasdaq Composite advanced 0.9%. The Dow Jones Industrial Average matched the gain with a 0.8% rise, benefiting from improving breadth and a massive post-earnings surge in Cisco Systems.

Cisco emerged as the top-performing stock in both the information technology sector and the broader S&P 500 after delivering a decisive earnings beat alongside significantly stronger-than-expected guidance. Management pointed to accelerating AI infrastructure demand and broad-based networking strength as key drivers of growth, sending the stock sharply higher and reinforcing confidence in the broader AI investment cycle.

The technology sector finished with a 1.9% gain, easily leading the market higher.

Meanwhile, NVIDIA continued to dominate investor attention. Shares rose another 4.4% after reports that the U.S. approved sales of the company’s H200 AI chips to ten Chinese firms. Additional support came from UBS, which raised its price target on the stock to $275 from $245. NVIDIA’s latest advance leaves the stock on the verge of a double-digit weekly gain and continues to reinforce its role as the market’s AI bellwether.

The PHLX Semiconductor Index added 0.5%, overcoming modest profit-taking following Wednesday’s rally. Software stocks outperformed the broader chip space, however, with the iShares GS Software ETF climbing 2.3% as investors continued rotating into AI-linked enterprise software names.

Adding further fuel to the AI narrative was the highly anticipated debut of Cerebras Systems. The AI infrastructure company priced its upsized IPO above expectations before soaring in its public market debut, underscoring the enormous investor appetite for pure-play AI exposure. The move also reignited debate around valuation excesses within the sector, as the company now trades at an extremely elevated revenue multiple despite robust enthusiasm surrounding the broader AI ecosystem.

Elsewhere, gains across the market were more moderate, though participation improved compared to recent sessions that were heavily concentrated in mega-cap technology names.

The energy sector finished among the stronger-performing groups after oil prices edged modestly higher. Geopolitical developments remained relatively quiet, with little market-moving news emerging from the summit between Donald Trump and Xi Jinping.

At the same time, investors took some profits in mega-cap names outside the technology sector, weighing modestly on the consumer discretionary sector and communication services sector. The materials sector and real estate sector also lagged.

Outside the large-cap benchmarks, the Russell 2000 gained 0.7%, while the S&P Mid Cap 400 rose 0.4%, reflecting healthier participation beneath the surface of the rally.

Overall, Thursday’s session reinforced the market’s ongoing conviction in the AI trade. Strong earnings growth, expanding infrastructure spending, and a steady stream of bullish AI-related catalysts continue to support momentum across technology and semiconductor stocks. While concerns surrounding stretched valuations and speculative excess remain present, investors have consistently stepped in to buy recent pullbacks across mega-cap tech and chipmakers, helping keep the broader market firmly anchored near record territory.

Our FTinvest 11 model portfolio gained 0.21% to close at 1,008.82, posting a modest rebound after several sessions of declines. The portfolio remains below its recent all-time high of 1,041.22, though today’s move suggests some stabilization following the recent pullback.

Based on the start-of-year level of 928.18, FTinvest 11 is now up approximately +8.69% year-to-date, maintaining solid gains despite increased volatility in recent weeks. The portfolio’s disciplined, value-driven approach continues to provide resilience as it navigates the current consolidation phase.