The AI investment frenzy reached new heights Tuesday as tech stocks powered all major indices to fresh records, with Apple briefly crossing $4 trillion in market value for the first time and Nvidia surging nearly 5%. Despite growing concerns about excessive valuations in the AI sector, investors can't seem to get enough of artificial intelligence plays.
The artificial intelligence investment boom reached fever pitch Tuesday as tech giants powered markets to fresh records, with Apple becoming the first company to briefly touch a $4 trillion market capitalization before closing just shy of that historic milestone. Microsoft also crossed the $4 trillion threshold as both tech titans rode the AI wave higher.
Nvidia, the undisputed leader in AI chips, surged nearly 5% on Tuesday while Microsoft climbed roughly 2%. The momentum lifted all three major indices to new intraday highs, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all posting gains fueled by tech sector strength.
But the AI frenzy extends beyond just stock prices. Nvidia made waves by announcing a massive $1 trillion investment in Nokia, which the Finnish telecom equipment maker says will accelerate its AI infrastructure plans. It's a striking transformation for Nokia - once synonymous with indestructible phones, now positioning itself as a key player in the AI revolution through cellular equipment and network infrastructure.
The deal highlights how tech companies are increasingly looking to each other for AI partnerships and investments. Microsoft holds a commanding 27% stake in OpenAI's for-profit business, which completed its restructuring Tuesday from a nonprofit into a hybrid model with a controlling stake in its commercial arm. That position could prove to be a goldmine if AI delivers on its revenue promises long-term.
"If our expectations for AI are correct, we are at the very beginning of a technology revolution," of Ark Invest told CNBC, dismissing bubble concerns while acknowledging market correction risks. Her comments capture the delicate balance investors are trying to strike - embracing AI's transformative potential while navigating increasingly stretched valuations.
