AI and Chip Stocks Stage Monday Rebound After Worst Week Since June as Earnings Season Begins

Technology and AI-linked stocks bounced back sharply on Monday, October 19, pulling the Nasdaq 100 up 1.2% and the S&P 500 up 0.4% after both indexes posted their worst weekly performance since June. The Dow Jones edged down 0.07%, leaving markets mixed but broadly relieved. Amazon was the standout gainer among megacaps, surging nearly 5% after Morgan Stanley named it a top pick and raised its price target to $350. Tesla climbed 3.76% ahead of its Wednesday earnings report, while Intel rose more than 4% following a JPMorgan upgrade to Neutral from Underweight on the back of growing AI server demand. AMD gained more than 3%, Micron rallied roughly 3%, and AI infrastructure names including Applied Digital, IREN and Nebius Group jumped 6% to 8% in early trading.

The rebound came despite Goldman Sachs reporting that hedge funds cut their technology exposure at the fastest pace in a decade during the prior week, and Friday's session saw the largest put volume day ever recorded for the S&P 500. CoreWeave, whose 25% collapse last week became the symbol of investor anxiety over AI debt financing, received a Goldman Sachs upgrade to Buy from Neutral Monday morning. Sources conflict on the revised price target, with some reports citing a cut to $106 from $139 and others citing a raise to $139, but the stock ended the session down 0.44% despite an early premarket surge of as much as 7%, underscoring that credit-market concerns have not fully cleared. The 10-year Treasury yield rose to 5.14% and WTI crude fell 2.89% after the Trump administration waived some Russia-related sanctions.

Investors are bracing for a decisive week of earnings that could either restore confidence or deepen doubts about the AI spending cycle. About 70 S&P 500 companies report results, with Netflix and General Motors on Tuesday, Tesla and Meta on Wednesday, and Procter and Gamble, Blackstone, Lockheed Martin and American Express rounding out the week. Bank of America noted an early 80% earnings beat rate for the season so far, below last quarter's 88%, with muted market reactions to results. Analysts and strategists are focused on whether hyperscaler capital expenditure guidance from Meta and others can justify debt-funded infrastructure expansion at a moment when the 10-year yield has reached 5.14%.

Several additional developments added texture to the day. Anthropic and cloud provider Nscale were reported to be in advanced talks on a $45 billion computing deal that could close within days, with Nscale's Monarch 2 facility offering 460 megawatts of compute power. DeepSeek and Huawei were separately reported by The Information to be collaborating on new AI chip designs targeted for next year, a direct challenge to Nvidia's dominance. Amazon also announced that its AWS Trainium chips would support the PyTorch coding language, expanding access for developers and pressuring Nvidia's CUDA software advantage. Nvidia itself ran a record 104-qubit fault-tolerant quantum simulation at the Julich Supercomputing Centre in Europe and has entered a technical correction, sitting roughly 12% below its recent record high of $243.