By Pranav Kashyap and Twesha Dikshit
Publication Date: 2026-02-06 15:11:00
Updated Feb. 6, 2026, 4:09 p.m. ET
The Dow Jones Industrial Average hit the historic 50,000 mark on Friday and the S&P 500 ended sharply higher, as Nvidia and other chipmakers soared and Amazon tumbled after the cloud heavyweight forecast a sharp increase in spending on AI infrastructure. Amazon dropped after saying it planned a more than 50% jump in capital expenditures this year, intensifying a race to dominate AI technology and following a similar announcement from Alphabet on Wednesday.
However, chip stocks rallied on expectations they would benefit from increased spending on AI data centers by Amazon and Alphabet.
Nvidia, Advanced Micro Devices and Broadcom all surged and the PHLX semiconductor index also made big gains.
Friday’s rallies in the S&P 500 and the Nasdaq followed three straight days of losses marked by worries about AI. Several software companies were hit this week by concerns that AI could create more competition and hurt their margins, while investors have also fretted about elevated valuations following years of steep gains in AI-related stocks.
“This trade has been volatile, and there have been selloffs at times, but I think there’s enough evidence that there’s real demand for AI products, real promise with what they can do, and a necessity of a lot of spending to get there,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.
“So when there’s this kind of a selloff, I think there’s a floor where there’s going to be a certain…
