The S&P 500 rallied on Friday, marking its most robust weekly performance since November, propelled by the stellar earnings reports from tech giants Microsoft and Alphabet, reigniting investor confidence in the AI-driven tech sector.
At 16:00 ET (20:00 GMT), the Dow Jones Industrial Average surged by 153 points, or 0.40%, while the S&P 500 climbed 1%. The NASDAQ Composite, weighted heavily with tech stocks, soared by 2%. The S&P 500 closed the week with a 2.7% gain, breaking a three-week losing streak.
Shares of Google-parent Alphabet (NASDAQ: GOOGL) surged by 10%, reaching a new record high, following its stronger-than-expected first-quarter earnings report, fueled by robust demand for its new AI offerings. In a notable move, Alphabet announced its inaugural dividend of 20 cents per share, a sign of confidence in its financial strength. Analysts at RBC commented that Alphabet’s quarterly results demonstrate its resilience against concerns surrounding Generation AI, cementing its position as a core holding for investors.
Meanwhile, Microsoft (NASDAQ: MSFT) witnessed a 2% increase in its share price, buoyed by robust demand for its AI products, which contributed to stronger-than-anticipated first-quarter earnings. Macquarie analysts reiterated Microsoft as their top pick in the Generation AI sector, citing stellar performances across key growth drivers, particularly Azure and Gaming.
In contrast, Intel Corporation (NASDAQ: INTC) faced a setback, plunging over 9% after issuing weaker-than-expected guidance for the second quarter. Concerns loom over Intel’s ability to keep pace with competitors in capitalizing on the AI market.
In economic news, the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index, aligned closely with expectations, rising 0.3% in March. The annual PCE inflation rate advanced by 2.7%, in line with forecasts. The data alleviated fears spurred by hawkish comments from several Fed officials, assuaging concerns of an overheating economy that could delay potential rate cuts.
Elsewhere in the market, Snap Inc. (NYSE: SNAP) witnessed a remarkable 27% surge in its stock price following the release of stronger-than-anticipated first-quarter earnings and an optimistic outlook. However, Roku Inc. (NASDAQ: ROKU) experienced a 10% decline, as the streaming device maker cautioned of challenging year-over-year growth comparisons post-price hikes. Exxon Mobil Corp. (NYSE: XOM) edged up nearly 3% despite reporting first-quarter results that missed estimates, attributed to weakened refining margins and natural gas prices.
