Nasdaq climbs over 1% as SpaceX, Super Micro boost AI sentiment

On Wednesday, the tech-heavy Nasdaq led Wall Street's gains after SpaceX and Super Micro Computer surpassed investor expectations with their quarterly results, boosting AI-related stocks. SpaceX, owned by Elon Musk, reported its first profit as a public company and showed a 7% increase in shares. The company's CEO suggested a merger with Tesla, which sent Tesla shares up by 3.5%.

Super Micro Computer, an AI server maker, also outperformed with a jump of over 9%, outpacing the S&P 500's top gainers. Investors were reassured by the resilient AI demand despite worries about sustainability and profitability in AI investments. The technology sector experienced a turnaround after a week of heavy selling due to a selloff in AI-linked stocks.

Marc Dizard, chief investment officer at Huntington Bank, emphasized that SpaceX's impressive performance reaffirmed the strength of the AI trade. Meanwhile, Netflix suffered a 4.5% drop after releasing a weaker-than-expected profit forecast for its fourth quarter. Alphabet, Google's parent company, also declined by 1.6%.