AMD unveiled new AI processors at Advancing AI 2024, directly competing with Nvidia's Blackwell chips, but received mixed analyst reactions.
Wall Street remains bullish on continued market gains as the S&P 500 approaches the 6,000 mark. Mary Ann Bartels of Sanctuary Wealth, chief investment strategist, expects the S&P 500 to hit 6,000 by year-end, with the index currently around 3% shy of that target. The milestone comes just eight months after the S&P 500 first eclipsed 5,000. On Monday, October 14, the S&P 500 and Dow Jones Industrial Average both reached all-time highs, closing up 0.8% and 0.5%, respectively, marking the bull market's second anniversary—an impressive recovery that has maintained its rally despite ongoing recession concerns and elevated interest rates in prior periods.
Artificial Intelligence-linked stocks have been the primary driver of market gains, with the Nasdaq gaining 1% and approaching a record of its own as of October 14. Third-quarter earnings season has reinforced optimism, with corporate earnings proving resilient amidst high rates and moderating inflation. However, analysts caution that high valuations could pose a challenge for continued growth. According to Citi equity strategist Scott Chronert, for AI to continue driving market gains, "you've got to have more companies delivering on the AI promise via margins and profitability metrics." Solita Marcelli, Chief Investment Officer for Americas at UBS Global Wealth Management, notes that third-quarter results could act as a catalyst for market gains as investors focus on tech fundamentals and AI.
UBS Global Wealth Management expects continued near-term volatility in technology stocks, stating: "We continue to expect increased volatility for technology stocks in the near term. However, we remain positive on the tech sector as well as the outlook for artificial intelligence (AI). Against this backdrop, we believe volatility should be utilized to build long-term AI exposure." October has historically been a turbulent month for tech stocks—monthly realized volatility for the Nasdaq 100 over the past 40 years has been 26% in October, compared to an average of 22% in other months. Despite this seasonal pattern, strong AI fundamentals and the upcoming earnings season are expected to reaffirm positive growth trajectories.
The AI semiconductor industry is expected to grow sharply, reaching $168 billion by the end of the year, with tech and AI companies anticipated to "beat and raise" expectations for the September quarter. Advanced Micro Devices, Inc. (NASDAQ: AMD) is positioning itself as a key player in AI-powered personal computers and data center solutions. At its Advancing AI 2024 event on October 10, 2024, in San Francisco, AMD unveiled its latest AI data center processors, including the MI325X chip, built on the same architecture as the MI300X with a new memory variant designed to accelerate AI-related tasks. Vendors like Super Micro Computer (NASDAQ: SMCI) are expected to begin shipping AMD's new AI chip to customers in Q1 2025, as the ongoing transition to smaller, more powerful AI chips drives significant performance improvements and continued investment in the sector.