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Nasdaq Plays Catch-Up: Is the Tech-Heavy Index Ready to Breakout?
Stock market performance in 2025 surprised to the upside as this bull market continued to impress the masses. The themes we saw last year appear to be carrying over into the new year, a positive sign that this multi-year rally still has legs.
Inflation measures have come down markedly from their 2022 peaks. This week’s release of the December CPI report showed headline inflation rose 0.3% over the prior month and 2.7% on an annual basis, with both figures matching expectations.
On a “core” basis, which strips out volatile food and energy components, consumer prices rose 0.2% over the previous month and 2.6% year-over-year. The 2.6% increase in core prices matched the climb from November and equates to the slowest annual pace of inflation dating back to March 2021.
A weakening U.S. dollar continues to boost the corporate earnings picture, a trend that looks likely to linger in the year ahead. Treasury yields have come down decidedly from their highs as well. Put together, these bullish tailwinds enhance the probability of further strength ahead for stocks.
Markets on Edge Despite Strong Start to 2026
Still, there are always reasons that critics can point to as to why stocks can’t possibly continue higher. Early in 2026, we have concerns regarding the recent U.S. military strike and capture of Venezuelan President Maduro, which has global implications.
Another negative headline arrived this past weekend after U.S. prosecutors opened a criminal investigation into the Federal Reserve, specifically Fed Chair Powell’s testimony as it relates to recent building renovations.
In related news, credit card companies saw their stocks suffer this week after President Trump proposed limiting credit card fees to 10%. While it’s unclear how this would be implemented without approval from Congress, the change would be a huge hit to companies like Capital One that have major credit card businesses.
And in the coming weeks, we’re also expected to receive an update from the Supreme Court on the legality of Trump’s tariffs, which sent shockwaves through financial markets early last year.
But as we know, stocks climb a wall of worry. The earnings outlook continues to progress favorably, with the U.S. consumer proving healthy and resilient.
Stocks to Watch as Nasdaq Attempts Breakout
Semiconductor stocks were trading higher Thursday morning after KeyBanc Capital upgraded two big players in Intel (INTC - Free Report) and AMD (AMD - Free Report) earlier in the week. Analysts at KeyBanc cited robust data center demand along with tightening memory supply spanning the entire semiconductor space.
Both AMD and Intel staged impressive recoveries in 2025, fueled by the relentless AI infrastructure buildout. But fresh developments—ranging from Trump administration support to Nvidia's strategic investment—add compelling layers to their stories. These updates reinforce why both remain attractive, even after strong 2025 gains.
AMD has been the standout performer, with shares rising nearly 80% in 2025, closing the year strongly amid MI300 accelerator ramps and data center dominance. The company's focus on high-performance computing paid dividends as AI server revenue surged, contributing to robust earnings growth.
Image Source: StockCharts
AMD CEO Lisa Su's CES keynote earlier this month underscored AI's transformative scale. She described demand as "going through the roof," predicting over 5 billion active AI users in the next five years. Notably, Su emphasized AI isn't displacing jobs but reshaping hiring toward AI-skilled roles, with AMD continuing robust recruitment. Her vision of "AI everywhere, for everyone" highlighted partnerships and platforms like Ryzen AI Halo for local deployment.
Meanwhile, Intel's narrative has shifted dramatically under the Trump administration's focus on domestic chip manufacturing. Last August, a historic deal granted the U.S. government a roughly 10% equity stake in Intel in exchange for $8.9 billion in funding, tied to expanded U.S. fabrication and national security priorities. President Trump has since highlighted this as a success, noting the stake's value has grown to "tens of billions" amid share appreciation.
Intel, long overshadowed, engineered a remarkable turnaround, more than doubling from around $20 per share to nearly $50 —bolstered by foundry progress, cost disciplines, and emerging AI PC traction with Core Ultra processors.
Image Source: StockCharts
Adding intrigue, Nvidia finalized a $5 billion stake in Intel in late December 2025 (that was announced in September), acquiring about a 4% ownership stake. This alliance aims at joint AI infrastructure development, providing Intel capital for foundry expansion while aligning incentives. It's a vote of confidence from the AI leader, potentially easing competitive tensions and opening co-development opportunities.
Bottom Line
The AI server market remains in the early innings, with multi-year hyperscaler expansions providing visibility.
In my experience, cycles like this reward patience. These developments—policy backing for Intel, Nvidia's endorsement, and Su's confident outlook—highlight shared AI server tailwinds amid sold-out capacity. Both stocks offer balanced exposure to U.S. semiconductor resilience.
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Nasdaq Plays Catch-Up: Is the Tech-Heavy Index Ready to Breakout?
Stock market performance in 2025 surprised to the upside as this bull market continued to impress the masses. The themes we saw last year appear to be carrying over into the new year, a positive sign that this multi-year rally still has legs.
Inflation measures have come down markedly from their 2022 peaks. This week’s release of the December CPI report showed headline inflation rose 0.3% over the prior month and 2.7% on an annual basis, with both figures matching expectations.
On a “core” basis, which strips out volatile food and energy components, consumer prices rose 0.2% over the previous month and 2.6% year-over-year. The 2.6% increase in core prices matched the climb from November and equates to the slowest annual pace of inflation dating back to March 2021.
A weakening U.S. dollar continues to boost the corporate earnings picture, a trend that looks likely to linger in the year ahead. Treasury yields have come down decidedly from their highs as well. Put together, these bullish tailwinds enhance the probability of further strength ahead for stocks.
Markets on Edge Despite Strong Start to 2026
Still, there are always reasons that critics can point to as to why stocks can’t possibly continue higher. Early in 2026, we have concerns regarding the recent U.S. military strike and capture of Venezuelan President Maduro, which has global implications.
Another negative headline arrived this past weekend after U.S. prosecutors opened a criminal investigation into the Federal Reserve, specifically Fed Chair Powell’s testimony as it relates to recent building renovations.
In related news, credit card companies saw their stocks suffer this week after President Trump proposed limiting credit card fees to 10%. While it’s unclear how this would be implemented without approval from Congress, the change would be a huge hit to companies like Capital One that have major credit card businesses.
And in the coming weeks, we’re also expected to receive an update from the Supreme Court on the legality of Trump’s tariffs, which sent shockwaves through financial markets early last year.
But as we know, stocks climb a wall of worry. The earnings outlook continues to progress favorably, with the U.S. consumer proving healthy and resilient.
Stocks to Watch as Nasdaq Attempts Breakout
Semiconductor stocks were trading higher Thursday morning after KeyBanc Capital upgraded two big players in Intel (INTC - Free Report) and AMD (AMD - Free Report) earlier in the week. Analysts at KeyBanc cited robust data center demand along with tightening memory supply spanning the entire semiconductor space.
Both AMD and Intel staged impressive recoveries in 2025, fueled by the relentless AI infrastructure buildout. But fresh developments—ranging from Trump administration support to Nvidia's strategic investment—add compelling layers to their stories. These updates reinforce why both remain attractive, even after strong 2025 gains.
AMD has been the standout performer, with shares rising nearly 80% in 2025, closing the year strongly amid MI300 accelerator ramps and data center dominance. The company's focus on high-performance computing paid dividends as AI server revenue surged, contributing to robust earnings growth.
Image Source: StockCharts
AMD CEO Lisa Su's CES keynote earlier this month underscored AI's transformative scale. She described demand as "going through the roof," predicting over 5 billion active AI users in the next five years. Notably, Su emphasized AI isn't displacing jobs but reshaping hiring toward AI-skilled roles, with AMD continuing robust recruitment. Her vision of "AI everywhere, for everyone" highlighted partnerships and platforms like Ryzen AI Halo for local deployment.
Meanwhile, Intel's narrative has shifted dramatically under the Trump administration's focus on domestic chip manufacturing. Last August, a historic deal granted the U.S. government a roughly 10% equity stake in Intel in exchange for $8.9 billion in funding, tied to expanded U.S. fabrication and national security priorities. President Trump has since highlighted this as a success, noting the stake's value has grown to "tens of billions" amid share appreciation.
Intel, long overshadowed, engineered a remarkable turnaround, more than doubling from around $20 per share to nearly $50 —bolstered by foundry progress, cost disciplines, and emerging AI PC traction with Core Ultra processors.
Image Source: StockCharts
Adding intrigue, Nvidia finalized a $5 billion stake in Intel in late December 2025 (that was announced in September), acquiring about a 4% ownership stake. This alliance aims at joint AI infrastructure development, providing Intel capital for foundry expansion while aligning incentives. It's a vote of confidence from the AI leader, potentially easing competitive tensions and opening co-development opportunities.
Bottom Line
The AI server market remains in the early innings, with multi-year hyperscaler expansions providing visibility.
In my experience, cycles like this reward patience. These developments—policy backing for Intel, Nvidia's endorsement, and Su's confident outlook—highlight shared AI server tailwinds amid sold-out capacity. Both stocks offer balanced exposure to U.S. semiconductor resilience.