Tech stocks rally after Nvidia and Salesforce revive the case for AI profits

AI optimism returns to the center of the market

Technology shares led Wall Street higher on Thursday, with the S&P 500 rising 0.7%, the Dow Jones Industrial Average adding 105.56 points, and the Nasdaq composite jumping 1.6% as investors responded to a fresh round of earnings from companies tied closely to artificial intelligence. The move put the S&P 500 closer to the record high it had set earlier in the month, underscoring how heavily the broader market remains dependent on the performance of a relatively small group of megacap technology companies. Reuters and AP both reported that Nvidia and Salesforce were the main drivers of the day’s gains, helping ease concern that enthusiasm for AI had run ahead of actual profits. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

The rally mattered because the AI trade has been carrying an unusual burden this year. Investors have spent months asking whether the money being poured into chips, data centers and enterprise software will translate into durable earnings, or whether valuations have simply outrun reality. Thursday’s session did not settle that debate, but it did provide one of the clearest signs yet that major beneficiaries of the AI cycle are still finding ways to grow into their expectations. That is why the market reaction went beyond a simple one-day bounce: it was read as a test of confidence in the whole AI ecosystem. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

Nvidia’s guidance reassures investors

Nvidia was the day’s strongest market force, with its shares surging 8.7% after the chipmaker reported quarterly profit and revenue above analyst expectations and, crucially, issued revenue forecasts that also beat estimates. Reuters said the company’s outlook signaled that demand for AI infrastructure remains robust, and AP reported that the guidance helped calm investor worries that the AI boom might be losing momentum. In a market where Nvidia is widely treated as a bellwether for the entire AI supply chain, the company’s numbers carried outsized importance. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

The company’s chief executive, Jensen Huang, said AI has reached what he described as an inflection point, emphasizing that it is already doing useful work and generating productive output. That message was aimed squarely at a market that has grown more skeptical after several years of enormous share-price gains in AI-related stocks. Reuters noted that Nvidia’s upbeat forecast also helped lift semiconductor and AI-linked names more broadly, reinforcing the idea that the market still believes the buildout phase of AI infrastructure has room to run. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

There was a broader strategic message in the stock move as well. Nvidia has been one of the most closely watched names in global markets because it sits near the center of the AI spending cycle, selling the chips needed to train and run advanced models. When its numbers are strong, traders often interpret that as evidence that cloud providers, software companies and enterprises are still spending aggressively. Thursday’s rally suggested that investors were willing to give that argument another hearing. ([marketscreener.com](https://www.marketscreener.com/news/nvidia-rises-after-signaling-longer-ai-spending-runway-ce7858dedb8ef022?utm_source=openai))

Salesforce turns AI into a stock-market reward

Salesforce delivered the other major boost to tech sentiment, with its shares jumping 22.6% after the company said AI helped drive one of its best quarters in years. AP reported that Salesforce topped analyst expectations for profit, raised its revenue outlook for the full year, and highlighted an expanded partnership tied to Anthropic’s Claude chatbot. Reuters said the stock’s move was one of its best daily performances in six years, reflecting how dramatically investor sentiment shifted after months of concern that AI would eventually erode demand for traditional enterprise software. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

For investors, the Salesforce report was important because it offered a counterpoint to the narrative that AI could simply cannibalize software incumbents. Chief executive Marc Benioff said the company is seeing strong demand for its AI and data products and that it is turning AI into customer success at scale. In practical terms, that means Salesforce is trying to show that AI is not just a defensive feature meant to protect its existing business, but a revenue engine in its own right. Reuters described the market response as evidence that a beaten-down corner of the software sector had regained some credibility. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

The sharp rise in Salesforce also mattered for the broader Nasdaq because software had been one of the market’s more fragile AI subsectors. Chipmakers have generally benefited from the boom, but software companies have faced a harder question: whether customers will pay for AI features or eventually build them elsewhere. Thursday’s move suggested that at least for now, investors are rewarding firms that can show AI is improving results rather than merely adding to their expense base. ([marketscreener.com](https://www.marketscreener.com/news/nasdaq-s-p-500-lifted-by-nvidia-s-forecast-investors-eye-speech-by-fed-s-warsh-ce7858ded08cf32d?utm_source=openai))

Not every company shared in the optimism

Despite the strength in technology, the market was not broadly euphoric. AP reported that the majority of stocks in the S&P 500 fell, showing that the day’s advance was concentrated in a narrow set of large names. HP fell 2.9% even after beating profit and revenue expectations, while Best Buy dropped 4.4% despite also topping estimates. Those moves showed that investors remain sensitive to signs that consumer demand may be under pressure, especially in categories exposed to inflation and cautious household spending. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

Retail weakness also reflected a more complicated economic backdrop. Dollar General gained 2.5% after a stronger quarterly profit, but Dollar Tree slipped 3.9% despite beating profit forecasts, as investors focused more on its revenue outlook than on the headline earnings beat. Reuters said the mixed reaction hinted that consumers may be trading down, which can help discount chains even when it signals broader stress in household budgets. For global investors, including those in Kenya watching U.S. markets for clues about technology and consumer demand, the message was that AI enthusiasm is powerful but still coexists with significant macro uncertainty. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

Bond markets echoed that mixed picture. Treasury yields edged higher after a report showed fewer Americans filed for unemployment benefits, suggesting the labor market remains relatively solid. Reuters said the data helped support the view that layoffs are still low, which in turn can keep pressure on interest rates. That matters because stronger growth can be good for corporate earnings, but it can also keep financing conditions tight and sustain the challenge for non-tech companies that depend on cheaper borrowing or more confident consumers. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

What Thursday’s move says about the AI trade

Thursday’s session did not prove that the AI rally is safe forever, but it did show that investors remain willing to pay for clear evidence of monetization. Nvidia offered reassurance that the infrastructure side of AI is still producing demand and revenue growth; Salesforce offered proof that enterprise software companies can use AI to accelerate sales rather than be displaced by it. Together, those results gave Wall Street a more balanced story than the one that has dominated recent skepticism: that AI spending may be expensive, but it is not yet exhausted. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

At the same time, the narrowness of the advance is a reminder that the market’s leadership remains concentrated. A few large technology names can lift the indexes even when many stocks are falling, which can make the overall market look healthier than it is beneath the surface. That is useful context for readers trying to understand why the S&P 500 can move toward record territory while large segments of the economy still face inflation pressure, uneven demand and caution from consumers. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

For now, the verdict from traders was clear: the AI story still has enough earnings power to command attention. Whether that confidence lasts will depend on the next rounds of results from chipmakers, software firms and the big cloud platforms that are spending heavily to build out the technology. Thursday’s rally bought the sector some breathing room, but it also raised the stakes for the reports still to come. ([investing.com](https://www.investing.com/news/economy-news/nvidia-earnings-jackson-hole-to-test-pillars-of-stock-rally-4871219?utm_source=openai))

Why it matters for Kenya and global investors

For Kenyan savers, pension funds, fund managers and retail investors who follow U.S. markets through global ETFs, technology-heavy index funds or offshore brokerage platforms, the move is relevant because it shows that a small number of American megacap companies can still dominate global risk sentiment. A rally led by Nvidia and Salesforce tends to lift not only Wall Street but also semiconductor suppliers, cloud-related businesses and international markets that trade on the assumption that AI capital spending will continue. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

It also offers a useful caution. A market driven by a few leaders can be vulnerable if those leaders stumble, and Thursday’s mixed performance outside tech suggests that the broader economy is not moving in lockstep with AI enthusiasm. For readers outside the U.S., the practical takeaway is that the AI trade remains a major global theme, but one that should be read alongside inflation, labor-market and consumer-spending data rather than in isolation. ([apnews.com](https://apnews.com/article/35c60216666d877595a3941df73030de?utm_source=openai))

Sources:

• Associated Press
• Reuters via Investing.com
• Reuters via MarketScreener
• Reuters via MarketScreener