(Bloomberg) -- The Nasdaq 100 Stock Index closed at the highest in nearly two years, with tech stocks gaining on high expectations for artificial intelligence and optimism that the Federal Reserve will steer the economy to a soft landing.
The benchmark climbed 1.2% Monday to 16,027, the highest since January 2022. Chipmakers have powered the latest leg up, with Advanced Micro Devices Inc. and Intel Corp. driving it to an 11% gain this month, putting it about 3% from its November 2021 record. Its year-to-date gain of almost 47% is the most since the post-pandemic boom in 2020.
The November rebound reversed a rough couple months for technology shares, as investors grew worried that slowing economic growth and rising tensions between the US and China would dent profits.
But optimism is now running high that the Fed is done hiking rates and a recession will be avoided, prompting traders to pile back into the biggest technology and internet stocks. Artificial-intelligence powerhouses such as Microsoft Corp. and Nvidia Corp. have both rallied back to all-time highs.
The enthusiasm for AI advances are responsible for much of the tech industry’s gains this year, with investors betting it will deliver massive profits eventually by becoming integral to large swathes of Corporate America. Nvidia, the maker of chips used in AI computing, which surged sharply this year, has risen over 23% this month as investors await its latest earnings report, due Tuesday.
Microsoft is pushing deeper into record territory after a nearly 12% gain this month. The software giant heartened investors with an earnings report that showed revenue gains in its fiscal first quarter, thanks to products powered by ChatGPT-owner OpenAI.
Other notable gainers in the month include Netflix Inc., Meta Platforms Inc. and Starbucks Corp. — all of which are up at least 10%.
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