Nasdaq Climbs 0.6% as AI Stocks Roar Back After Last Week's Rout, Led by SpaceX Surge and Super Micro Rally

NEW YORK — The Nasdaq composite rose 0.6% in early trading Wednesday as artificial intelligence stocks rebounded. Strong results from SpaceX and Super Micro Computer reassured investors that demand for AI computing power remains strong.

The tech-heavy index was at 26,584.19 shortly after the open, up about 159 points from Tuesday's close of 26,424.82. The S&P 500 gained 0.2%, and the Dow Jones Industrial Average rose 0.2%.

SpaceX and Super Micro lead

SpaceX, the Nasdaq's newest heavyweight, jumped about 9% after reporting third-quarter results late Tuesday. Revenue rose 161% to $14.58 billion, well above Wall Street estimates, and net income was $4.4 billion. Its AI business, which rents computing power to companies such as Anthropic, grew about ninefold.

During the earnings call, Musk said large cloud companies and smaller firms have been asking to rent more of SpaceX's computing capacity. He said the company could rent it out several times over if it accepted every request. The comments sent AI infrastructure stocks higher in after-hours trading.

Musk also said SpaceX and Tesla have formed special committees to evaluate a merger. Tesla shares rose about 3%.

Super Micro Computer jumped more than 13% after saying its quarterly revenue would be about $4 billion more than it had forecast, citing demand for AI platforms. Its update and SpaceX's results helped lift chipmakers and data center suppliers. AI connectivity company Credo Technology rose about 8%, and power component maker Vicor gained about 9%.

Asian chip stocks also rallied overnight on the Super Micro news.

Recovering from a rout

The rebound follows one of the Nasdaq's worst weeks this year. The index fell about 4.5% last week, including a 2.1% drop on Friday. Investors sold AI and semiconductor stocks after the September consumer price index came in hotter than expected and after concerns grew about the heavy debt some companies are taking on to build AI data centers.

The Nasdaq hit a record on Oct. 5 and closed above 27,300 on Oct. 9. Even with Wednesday's gain, it remains about 3% below that level.

On Tuesday, the index barely moved, slipping 0.02%. It swung from a loss of more than 250 points to a gain of about 170 points during the day as investors shifted money out of big tech and into smaller companies and other sectors.

Not all tech gained

Some major tech companies fell. Netflix dropped about 6% in premarket trading after its latest quarterly report. Investors are also waiting on results from Tesla, Meta Platforms and IBM, all due after the close.

Meta's report is especially important for the AI trade. The company is one of the biggest spenders on data centers, and any change in its spending plans could affect chipmakers, server makers and power equipment suppliers.

Rates still matter

High interest rates remain the biggest challenge for growth stocks. The 10-year Treasury yield was about 5.12% on Tuesday, close to its highest level since the early 2000s. Higher yields make future corporate profits worth less to investors today, which hurts high-valued tech stocks most.

The Federal Reserve raised rates in September, and markets expect another increase by year's end. Higher oil prices, driven by the conflict around the Strait of Hormuz, have added to concerns about inflation.

Analysts see room for a bounce

Some market strategists said the strong results could set off a short-term rally after last week's selloff. They said AI infrastructure stocks looked oversold, and historically that often leads to at least a brief rebound.

Still, the gains will need support from the next round of earnings. Microsoft, Alphabet, Amazon and Apple are expected to report in the coming weeks. Nvidia reports in November.

For now, SpaceX and Super Micro have shown that demand for AI computing is still strong, which helped the Nasdaq recover some of last week's losses.