Nvidia's unveiling of a new artificial intelligence chip ignited a broad rally in technology stocks on Monday, lifting shares of enterprise software giants and PC makers. ServiceNow and Adobe shares jumped as investors bet the chip would boost demand for AI-powered applications, while Microsoft, Dell, and HP all rose on expectations of a new wave of AI-enabled personal computers.
The announcement arrives as markets turn cautiously optimistic, with the Dow Jones Industrial Average posting gains amid ongoing hopes for a U.S.-Iran deal. All three major indexes ended May on a strong note, and stock futures rose to kick off June trading, with Nvidia leading the charge. The chipmaker's own shares surged on the news.
Jensen Huang, Nvidia's CEO, also made waves by calling Marvell Technology "so essential" to AI development, suggesting the firm could join the trillion-dollar club. Marvell's stock immediately surged on the comment. Meanwhile, analysts highlighted Broadcom, Micron, and Sandisk as other big winners in the semiconductor space.
However, not all tech names benefited. Credo Technology Group saw its stock plunge after an earnings miss, suggesting the AI trade remains highly selective. The rally underscores a growing conviction that AI agents are increasing demand for software rather than reducing it, but the divergence among stocks signals that investors are closely scrutinizing company-level execution.
Some analysts caution that Nvidia's valuation, while lower than peers', may already reflect much of the AI chip optimism. Predicting a sustained June rally runs the risk of overlooking macroeconomic headwinds, including ongoing trade negotiations and geopolitical tensions.