By Khadija Saeed
Publication Date: 2025-12-24 16:03:00
As of late morning on Wednesday, December 24, 2025, U.S. markets are trading through a holiday-thinned, shortened Christmas Eve session with one message dominating the tape: investors are back in “AI mode.” The S&P 500 pushed to a new intraday record, buoyed by renewed appetite for heavyweight AI and tech names and growing confidence that the Federal Reserve could deliver additional rate cuts in 2026—two catalysts that have repeatedly powered the AI-stock trade over the past three years. [1]
But beneath the headline index level, today’s AI-stock story is more nuanced than a simple “chips up, everything else follows” narrative. From fresh questions about Intel’s foundry ambitions to a new wave of enterprise-AI dealmaking and mounting scrutiny on how AI infrastructure is being financed, investors are ending 2025 by debating what matters most for AI stocks in 2026: demand, margins, funding, or geopolitics.
The market backdrop: record highs return as AI leadership reasserts itself
The S&P 500’s record move comes after a choppy stretch in November, when worries about tech valuations and “AI bubble” dynamics resurfaced and pulled the index down meaningfully from October peaks. Reuters notes the AI trade regained momentum after upbeat Nvidia earnings and, importantly, Micron’s outsized profit forecast helped re-energize confidence in the AI hardware cycle—especially the memory side of the buildout. [2]
That rebound has restored the familiar year-end pattern:…
