Nasdaq Hits New Highs on AI Stocks
The Nasdaq reached new heights driven by artificial intelligence (AI) stocks, with analysts predicting continued growth. Several companies, including Palantir, may see increased activity. Morningstar says a particular Nasdaq stock is still undervalued.
The Nasdaq has hit a new high, with artificial intelligence stocks among the primary drivers of the surge. Analysts predict these stocks will continue to lead index performance as enterprise AI adoption expands across industries, with hyperscaler capex commitments providing near-term revenue visibility for chip and infrastructure names.
A specific AI stock flagged by Morningstar as meaningfully undervalued has yet to see a commensurate price increase, sparking interest from value-oriented investors looking to identify opportunities in a sector where most names trade at elevated premiums. This divergence between the index's new highs and pockets of undervalued AI plays underscores the increasing dispersion within the sector.
Not all AI-adjacent names are participating in the rally. PLTR has faced scrutiny over its governance risk and stretched 82x price-to-sales multiple, and some analysts argue expectations are already priced to perfection for several Magnificent Seven constituents heading into earnings. The Nasdaq's record run may prove durable if Big Tech results confirm robust AI monetization — or vulnerable to a sharp rotation if guidance disappoints or the Fed signals a less accommodative rate path.
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