Tech Extends Rally as AI Earnings Impress but Caution Lingers

U.S. and Asian equities extended gains led by the tech and semiconductor sectors, following strong earnings from Qualcomm, AMD, and Alphabet. Investors appear confident that AI demand and improving trade conditions will sustain momentum but valuation risks remain front and center.

Key Drivers

• Earnings boost: Qualcomm’s 11% surge after better than expected data-center chip sales reinforced the AI investment theme.

• Global optimism: A softer dollar and improving supply chain outlook helped lift sentiment across global tech.

• Concentration risk: The rally remains dependent on a handful of mega caps, leaving broader indices exposed to profit taking.

“AI is keeping the growth story alive, but the market is extremely top heavy,” noted Bank of America strategist Jill Carey. “If one big name stumbles, sentiment could turn fast.”

Tech earnings are powering equities higher but the rally still runs on narrow leadership. Until participation broadens, every pullback could turn into a stress test for bulls.