Tech stocks experienced a surge in late hours as Nvidia’s quarterly results sparked renewed optimism about the potential of artificial intelligence (AI). Investors are hopeful that the chipmaker’s upbeat outlook for its Blackwell lineup will help reignite the AI-driven rally, boosting confidence in the sector despite a somewhat underwhelming performance in its latest earnings.
A major exchange-traded fund tracking the Nasdaq 100 (QQQ), worth $330 billion, saw a rise after the close of regular trading. Nvidia, often seen as a bellwether for AI, posted solid revenue, including $11 billion from its Blackwell chips in the fourth quarter. The company described the product’s rollout as its “fastest product ramp” ever, helping to calm investor fears about slower AI growth, especially amid concerns over the spending pace of data center operators.
Derren Nathan of Hargreaves Lansdown noted that Nvidia managed to surpass expectations despite challenges in production and AI demand. The company’s guidance for the upcoming quarter exceeded predictions, reinforcing its resilience in a shaky AI industry.
Broader Market Activity: Mixed Performance Amid Trade Uncertainty
The broader market showed mixed performance, with the S&P 500 remaining relatively flat and the Nasdaq 100 posting a modest 0.2% gain. The Dow Jones Industrial Average, however, dipped by 0.4%. Investors were processing a stream of trade-related statements from President Donald Trump, which added volatility to the market.
Bond markets saw some action as well, with the yield on 10-year Treasuries slipping four basis points to 4.25%. The dollar, meanwhile, ticked up by 0.1%.
Stock Picker Opportunities: Shifting Focus Beyond Big Tech
While big tech stocks like Nvidia have been dominant in recent years, Morgan Stanley’s Lisa Shalett pointed out that opportunities to find the next big winners have opened up. With the technology sector facing challenges and a drop from its peak, investors are looking beyond the “Magnificent Seven” tech giants and exploring other sectors.
Shalett sees potential in sectors such as financial services, domestic industrials, energy, materials mining, consumer services, and healthcare—particularly the growing applications of generative AI in healthcare. With tech stocks struggling this year, active stock pickers have seen better performance, with nearly 49% of actively managed mutual funds and ETFs beating the S&P 500 so far in 2025. This is a significant improvement from 38% at the same time last year and far above the 17% outperformance seen over the past decade.
Expanding Opportunities Across Sectors
Bank of America’s Savita Subramanian sees a broader trend emerging beyond just the tech sector. She noted that opportunities within the S&P 500 are not limited to mega-cap tech stocks, signaling a shift towards more diversified investing. While global markets may face challenges, U.S. stocks are expected to continue broadening beyond tech, offering investors new opportunities for growth outside the traditional technology sector.
In conclusion, while Nvidia’s performance helped boost tech stocks in late trading, broader market trends suggest that investors are increasingly looking beyond the largest tech companies for potential growth, with other sectors and actively managed funds showing stronger performance in 2025.
Related topics:
