Wall Street rebounds as AI infrastructure costs loom
US markets recovered from previous losses, with tech stocks leading the gain. Analysts describe the recent volatility as a financing panic driven by concerns over data center funding.
US markets rebounded following previous losses: the Nasdaq 100 rose 1.2%, the Philadelphia Semiconductor Index gained 1.6%, and the S&P 500 increased 0.4%. Western Digital and Sundisk rose over 5%, and Amazon gained significantly after Morgan Stanley raised its price target from $335 to $350. This followed reports that data center operator Enscale may sell computing power to AI developer Anthropic for approximately $45 billion. WisdomTree described the prior week's sell-off as a 'financing panic' driven by concerns over who will fund data centers while 10-year US Treasuries yield over 5%. Upcoming earnings from Meta, Tesla, and SAP are seen as a stress test. Citigroup estimates the tech sector will deliver nearly 70% of global profit growth next year. Investors are advised to check their tech exposure, noting that MSCI World funds hold significant tech positions.