S&P 500 Hits Record High Above 7,400, Driven by AI Boom

The S&P 500 index surpassed the 7,400 mark, reaching a record high. Even the risk of war with Iran could not stop the artificial intelligence (AI) boom.

Reuters Yonhap News

On May 11 (local time), at the New York Stock Exchange (NYSE), the S&P 500 index, which focuses on large-cap stocks, closed at 7,412.84, up 13.91 points (0.19%). This marks an 8.29% increase since the end of last year and the first time in history the index has crossed the 7,400 threshold.

Until February, the S&P 500 hovered around the 6,900 level. After the outbreak of the Iran war, it even dropped to the 6,300 level at the end of March. On a monthly basis, the index fell by more than 5% in March, but quickly rebounded, gaining over 10% last month and continuing its upward trend this month. It has now risen for six consecutive weeks, marking the longest weekly winning streak since October 2024.

AI remains at the core of the S&P 500 rally. This year's upward trend has been led by semiconductor-related stocks such as Intel, Micron, AMD, and SanDisk. Some big tech companies, including Alphabet and Amazon, are also supporting the index's rise.

The surge in semiconductor stocks has been particularly steep. SanDisk’s share price has skyrocketed by over 550% this year, while Intel has jumped more than 250%. Micron and AMD have also soared by approximately 179% and 114%, respectively. In addition, Broadcom and Nvidia have risen by about 24% and 18%, respectively. The expansion of AI data centers has driven increased demand, resulting in improved earnings and supporting share price gains.

Big tech companies showing growth in their cloud businesses, fueled by AI demand, also performed strongly. Alphabet, Google’s parent company, has climbed over 24% this year based on its Class A shares, while Amazon has jumped 16.57%.

Ross Mayfield, investment strategist at Baird, told Reuters Yonhap News, “The semiconductor and AI infrastructure sectors have now taken on a life of their own. The momentum and chase buying to get in on some of these stocks is so strong that it seems almost disconnected from any particular news or announcement.”

Some analysts even predict that the S&P 500 could surpass the 8,000 mark. Ed Yardeni, president of Yardeni Research and a veteran Wall Street investor, raised his year-end S&P 500 target from 7,700 to 8,250 in his investor note the previous day. He explained, “I have never seen consensus earnings forecasts for the present and the coming years rise as quickly as they have in recent months. As a result, we are seeing an earnings-driven melt-up in the stock market.”

Nichole Inui and Alastair Pinder, strategists at HSBC Holdings, projected that the S&P 500 index could reach 7,650 by the end of this year, citing strong earnings and a recovery in tech stocks. They also noted the possibility of surpassing 8,000. They analyzed that “the recovery in overall sentiment toward tech stocks, continued adoption of AI, and easing of concerns regarding geopolitics, trade, and interest rates” could drive the index even higher.

This content was produced with the assistance of AI translation services.