From Kiplinger · · 2m
Nasdaq hits new high as AI stocks surge
Tech stocks power markets higher despite geopolitical tensions and inflation concerns.
In brief
Tech stocks power markets higher despite geopolitical tensions and inflation concerns. The Nasdaq reached a record closing high driven by strong tech earnings and AI momentum, while broader markets paused after Monday's rally. Originally reported by Kiplinger.
Nasdaq hits record high
The Nasdaq Composite closed up 0.5% at 27,244, a new record high, as AI stocks continued climbing. The Dow and S&P 500 took a breather after Monday's rally.
One tailwind, two headwinds
Strong corporate fundamentals, especially tech profits, are lifting markets. But geopolitical risks, higher oil prices, and inflation uncertainty are creating headwinds.
“The simple arithmetic at the moment is that the markets are being driven by one big tailwind and two big headwinds.”
Oil prices ease slightly
West Texas Intermediate crude fell for a fifth straight day after Saudi Arabia said it's close to reopening a pipeline damaged in a drone attack. Oil is still up nearly 11% for the month.
Trump-Xi meeting this week
President Trump is scheduled to meet with Chinese President Xi Jinping in Washington this week. Wall Street is watching for news on tariff agreements and access to critical minerals.
“Any positive developments on that front could lift equities, particularly those in technology, industrial and consumer stocks.”
Sandisk jumps on AI bet
Sandisk surged 6.8% after Rosenblatt Securities initiated Buy coverage with a $2,400 price target, citing AI infrastructure demand for flash memory chips. The stock is up 700% year to date.
“New AI compute platforms are creating an opportunity to reposition NAND flash from a commodity storage medium to a more system-critical component of AI infrastructure.”
Analyst consensus bullish
Of 25 analysts covering Sandisk, 21 rate it Buy or Strong Buy, three say Hold, and one says Sell. This represents a high-conviction consensus Buy recommendation.
Berkshire builds Lennar stake
Berkshire Hathaway bought 2.6 million more Lennar shares, bringing its stake to 23.7 million shares, or just over 10%. This sparked speculation Warren Buffett may acquire the homebuilder.
Homebuilders face headwinds
Lennar popped 6.4% on the Berkshire news, but homebuilders are struggling. The 30-year mortgage rate hit a 14-month peak above 7%, and new home sales fell 10.5% from June to July.
Lennar down 23% this year
Lennar shares have fallen 23% year to date through Monday's close, reflecting the tough environment for homebuilders. Berkshire CEO Greg Abel said the company maintains long-term belief in housing fundamentals.
“We maintain a long-term belief in the strength of America's housing market and its underlying fundamentals, which we see as enduring over time.”
What it means
The Nasdaq reached a record closing high driven by strong tech earnings and AI momentum, while broader markets paused after Monday's rally.
