S&P 500 nears 7,575 record as tech stocks fuel 10% rally

The S&P 500 closed at 7,575 on Friday, its highest level in weeks, as a rebound in Nvidia and AMD pushed the benchmark within striking distance of an all-time high.

The S&P 500 rose to 7,575 on Friday, approaching its all-time high, as a tech-led rebound pushed the benchmark's year-to-date gain past 10 percent.

"The market is consolidating around the view that AI infrastructure spending remains intact despite macro uncertainty," said Michael Wilson, chief equity strategist at Morgan Stanley. "The Nvidia and AMD recoveries this week reinforce that narrative."

The Nasdaq-100 Technology Sector index has surged 38 percent in 2026, far outpacing the S&P 500's 10 percent advance. Nvidia jumped to $210 on Friday, up 10 percent from its monthly low, after forming a bullish falling wedge pattern on the charts. AMD has gained 149 percent year to date, while Micron Technology has soared 210 percent. Snowflake, the cloud data platform, has rallied 97 percent over the past three months as AI software stocks regain favor.

The rally has compressed valuations even as earnings accelerate. The S&P 500's forward price-to-earnings ratio is now lower than at the start of the year, while FactSet data shows index companies' earnings are projected to increase 23.3 percent in the current quarter — well above the five-year average of 16.4 percent. The information technology sector alone is expected to post 63.3 percent earnings growth this quarter.

Nvidia's technical breakout signals more upside

Nvidia's chart pattern suggests further gains ahead. The stock rebounded from its 200-day moving average and has broken above the upper trendline of a falling wedge formation, a pattern that typically precedes bullish breakouts. The MACD indicator has also made a bullish crossover. Analysts tracked by Benzinga expect second-quarter revenue of $91.7 billion, with full-year revenue projected at $392 billion. Nvidia's forward price-to-earnings ratio of 23.5 sits below the sector median of 25 and well under its five-year average of 43.

The company faces rising competition from AMD and from hyperscaler clients like Google, Meta, and Microsoft that are developing their own chips. OpenAI recently unveiled an inference chip built in collaboration with Broadcom. Still, Nvidia remains dominant in the GPU market, and demand continues to outstrip supply.

AMD and Micron ride the AI infrastructure wave

AMD has landed major customers including Meta Platforms, OpenAI, and potentially Anthropic for its Instinct graphics cards and Epyc server processors. Citigroup estimates the server CPU market's addressable opportunity will reach $132 billion by 2030, and AMD has been steadily gaining share from Intel. The company's earnings are forecast to rise 77 percent in 2026 and 78 percent in 2027.

Micron, meanwhile, signed 16 long-term supply agreements last quarter that will generate at least $100 billion in cumulative revenue. Customers are now entering five-year commitments to secure memory chip supply, reflecting the intensity of AI-driven demand. Micron's earnings are expected to jump 784 percent in the current fiscal year.

What comes next

The S&P 500's path to new highs depends on whether the tech rally broadens. FactSet projects the index could reach approximately 8,920 over the coming year, implying an 18 percent upside from current levels. That forecast hinges on sustained earnings growth and the absence of a macro shock. The next major test comes as second-quarter earnings season begins, with Nvidia and AMD among the most anticipated reports.

This article is for informational purposes only and does not constitute investment advice.