AI hasn’t peaked yet

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open informs investors about everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Back-to-back gains for S&P and Nasdaq
US stocks mostly up on Mondaywith S&P 500 and Nasdaq Composite climbing two days in a row. Artificial intelligence dear Nvidia closed at a record high. Pan-European Stoxx 600 index advanced 0.95%although it peaked after US President-elect Donald Trump dismissed a report that his tariffs it might not be as strong as initially thought.

Foxconn shows that artificial intelligence is still relevant
Foxconn, which does business as Hon Hai Precision Industryit was said on Sunday statement that the company’s fourth quarter revenue, which was up 15% year-over-year, was the highest ever in the company’s history for that period. Foxconn’s figures show that artificial intelligence is still relevant, sending stock Nvidia and other global semiconductor companies.

An online partnership for charging electric vehicles
Shares of Volkswagen and Xpeng rose on Monday after the two companies announced a memorandum of understanding in which they pledged to open their superfast charging networks to each other’s customers. Volkswagen and Xpeng will also explore cooperation on super fast co-branded charging stationsthe companies announced.

Trudeau steps down
Canadian Prime Minister Justin Trudeau said at a press conference on Monday that he would steps down from the head of the ruling Liberal Party but will remain as prime minister until a new leader is chosen before general elections due to be held at the end of October. He added that the Canadian Parliament will suspend work until March 24, when the vote of confidence will be held.

[PRO] Quality stocks against rising exchange rates
The 10-year Treasury yield has continued its rise until early 2025, which puts pressure on stocks. Michael Wilson, chief U.S. equity strategist at Morgan Stanley, recommends investors stick with quality stocks to weather potential market turmoil. Here is a list of shares which passed the screening of Wilson’s team.

The following is a great earnings report from an electronics manufacturer Microsoft’s announcement on Friday that he plans to invest 80 billion dollars in fiscal 2025 to build data centers that can handle AI workloads.

Those reports suggest that companies continue to invest heavily in AI, and the peak is not yet reached.

Investors are also looking forward to Nvidia CEO Jensen Huang’s keynote address at the 2025 Consumer Electronics Show 2025, which will take place around 11am Singapore time.

Aided by such headwinds, Nvidia shares jumped 3.4% — their third straight day of gains — to a record $149.43. Shares of the company rose further in extended trading and are currently hovering above the $150 level.

Broadly speaking, VanEck Semiconductor ETF jumped more than 3%.

Those moves helped propel the major averages forward. Heavy technology Nasdaq Composite was a convincing winner, rising by 1.24%, while S&P 500 increased by 0.55 percent.

However, Dow Jones Industrial Average decreased by 0.06%. The index lost earlier gains accumulated when it was announced that Trump might ease his tariffs on imports, which would benefit its constituent blue-chip companies, such as those in the consumer discretionary sector.

Despite those upbeat reports and Monday’s positive market movements, the year ahead still looks bleak.

“I think the market is pretty bullish on tech right now, expecting earnings growth of 20% this year versus 12.8% for the market … but valuations really do seem restrictive,” said CFRA Research chief investment strategist Sam Stovall .

The real test for AI, then, is whether companies can use it to increase revenue, rather than just increasing the prices of picks and shovels in the sector.

— CNBC’s Ryan Browne, Jordan Novet, Pia Singh and Tanaya Macheel contributed to this report.