[New York Stock Market] AI Turns From Fear to Hope in Just One Day... Nasdaq Up 1.05%

Compatible with Google and Other Platforms
AI Seen as Complementing the Software Industry
AMD and Meta Supply Deal Sends Shares Up 14% Intraday

As Anthropic's demo event was made public, market expectations for artificial intelligence (AI) turned positive in just one day, and the three major U.S. New York stock indexes all closed higher on February 24 (local time).

On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 370.44 points, or 0.76%, from the previous session to close at 49,174.50. The large-cap S&P 500 Index gained 52.32 points, or 0.77%, to 6,890.07, while the tech-heavy Nasdaq Composite climbed 236.40 points, or 1.05%, to finish at 22,863.682.

Among the top stocks by market capitalization, gains were notable in Nvidia (0.51%), Apple (2.19%), Microsoft (MS) (0.95%), Amazon.com (1.58%), and TSMC (4.29%). In particular, in the software sector, Salesforce and ServiceNow each rose by more than 4% and 1%, respectively. DocuSign also advanced close to 3%, and IBM added 2.53%.

The Anthropic demo shifted the mood in the market that day. Anthropic announced that its Claude Coworking can be integrated with the tools companies already use, including DocuSign, Google Drive, and Gmail.

There had been concerns that AI would erode the software industry and negatively affect related sectors, but the hope that AI can complement the work of software companies appears to have boosted investor sentiment.

Anshul Sharma, chief investment officer at Savvy Wealth, said, "The market itself has been gripped by a 'sell first, think later' mentality, which has dealt a significant blow to software firms," adding, "Today's price action is a classic relief rally following such a wave of selling."

Analysts at Wedbush Securities also said in a report that day that the Anthropic demo "shows that the competitive threat to software from AI has been 'overstated'." They went on to say, "New AI tools will not completely replace the existing software ecosystem and data environment, and AI tools will only be as useful as the data they can access."

The semiconductor sector also helped drive the market higher. AMD and Meta announced that they had signed an AI chip supply contract worth up to 60 billion dollars over the next five years. AMD agreed to supply Meta with its latest MI450 chips in quantities sufficient to build data centers with a capacity of 6 GW. A capacity of 6 GW is roughly equivalent to the amount of electricity used in one year by about 5 million U.S. households.

The two companies also tied the supply contract to an equity-linked structure. AMD granted Meta the right to acquire up to 160 million shares at 0.01 dollars per share. Under the structure, Meta receives equity each time it places a chip order. Meta will receive its first shares in the second half of this year, when the 1 GW volume is shipped.

If the entire contract is executed, Meta could end up securing about a 10% stake in AMD. AMD's share price jumped 14% intraday on the New York Stock Exchange immediately after the announcement.

Meanwhile, according to the CME FedWatch tool of the Chicago Mercantile Exchange (CME), the federal funds futures market is pricing in a 98% probability that the benchmark interest rate will be kept on hold through March.