The AI peak hasn’t crested yet

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Back to back gains for S&P and Nasdaq
the stocks of the United States especially rose on Mondaywith the S&P 500 and Nasdaq Composite climb two days in a row. Expensive artificial intelligence Nvidia closed at a record high. The pan-European Stoxx 600 index advanced 0.95%Although it came out of the blue after the President-elect of the United States, Donald Trump, issued a report that his tariffs it may not be that severe as originally thought.

Foxconn shows that AI is still hot
Foxconn, which trades as Hon Hai Precision Industrysaid on a Sunday statement that the company’s fourth quarter revenue, which grew 15% year over year, was the highest ever in the company’s history for that period. Foxconn’s numbers suggest artificial intelligence is still hot, send the stocks of Nvidia and other global semiconductor companies.

Partnership on the charging network for EVs
Actions of Volkswagen and Xpeng arose on Monday after the two companies announced a memorandum of understanding in which they committed to open their respective super-fast charging networks to each other’s customers. Volkswagen and Xpeng will also explore cooperation co-branded super-fast charging stationsthe companies said.

Trudeau resigns
Canada’s prime minister, Justin Trudeau, said at a press conference on Monday that he would do so resigns as head of the ruling Liberal Party but will remain as Prime Minister until a new leader is chosen before general elections from the end of October. He added that the Canadian Parliament will suspend its activity until March 24, when a vote of confidence will be held.

[PRO] Quality actions against rising rates
U 10-year Treasury yield continued its ascent to start 2025, which puts pressure on stocks. Morgan Stanley’s chief equity strategist, Michael Wilson, recommends that investors stick with quality stocks to ride out any market turmoil. Here is a list of actions which passed the screening done by Wilson’s team.

The electronics maker’s glowing earnings report follows Microsoft I announced on Friday that I am thinking of invest $80 billion in fiscal 2025 to build data centers that can handle AI workloads.

Those reports suggest that companies will continue to invest heavily in AI, and the peak has not yet been reached.

Investors are also waiting for Nvidia CEO Jensen Huang’s keynote address at the 2025 Consumer Electronics Show 2025, which will start around 11 am Singapore time.

Riding on the back of such tailwinds, Nvidia shares jumped 3.4% – its third consecutive day of gains – to close at a record high of $149.43. The company’s stock rose further in extended trading, and is currently above the $150 level.

More generally, the VanEck Semiconductor ETF jumped more than 3%.

Those moves helped propel the majors forward. The technological heavyweight Nasdaq Composite was the clear winner, going up 1.24%, while the S&P 500 rose 0.55%.

However, the Dow Jones Industrial Average down 0.06%. The index pared previously accumulated gains when it was reported that Trump could soften his tariffs on imports, which would have benefited his constituent blue-chip companies, such as those in the consumer discretionary sector.

Despite those optimistic reports and positive market movements on Monday, the year ahead continues to look rocky.

“The market is, I think, being quite optimistic about technology at the moment, looking for earnings growth of 20% this year versus 12.8% for the market … but the valuations seem restrictive,” said the CFRA Research chief investment strategist Sam Stovall.

The real test for AI, therefore, is whether companies can use it to increase revenue, rather than just sending the price of small and large sector shovels higher.

— CNBC’s Ryan Browne, Jordan Novet, Pia Singh and Tanaya Macheel contributed to this report.