(Oct 22) : Wall Street’s wagers on artificial intelligence regained traction, with stocks rising in late hours as solid results bolstered confidence in the trade that has powered the bull market.

An exchange-traded fund tracking the S&P 500 rose after the close of regular trading. Tesla Inc.’s profit beat estimates, assuaging worries about increased investments into new areas such as AI. Meta Platforms Inc. boosted its capital spending outlook and announced plans to create a new class of nonvoting stock, part of efforts to escalate its bet on technology.

“Our investments are paying off, the core business is strong, and we’re seeing velocity across the board,” Meta’s Chief Executive Officer Mark Zuckerberg said in Wednesday’s report.

In regular hours, tech shares powered gains as a blowout earnings report from SpaceX eased concern over whether the AI investment boom can prove sustainable. Super Micro Computer Inc. jumped on solid preliminary figures. The Nasdaq 100 rose 1.1%.

Investors’ anxiety over the durability of the AI trade had recently surged amid fears that the substantial upfront capital spending the technology needs will take longer than expected to translate into profits and productivity gains.

“So, does this signal that the worst is over when it comes to the selloff across tech, and in particular chip stocks, seen since the beginning of this month? Maybe,” said David Morrison at Trade Nation. “Certainly, there has been yet another impressive start to the earnings season.”

“Despite hedge funds sharply reducing tech exposure, the market isn’t giving up on AI,” said Mark Hackett at Nationwide. “Investors simply want to see the payoff, and SpaceX earnings may be an early sign of that.”

Billionaire Ken Griffin said investors are “almost certainly” in the midst of an AI bubble as many companies are still grappling with just how much they’ll spend on the technology and how it will transform the economy.

BlackRock Inc. Chief Executive Officer Larry Fink warned that delays in building data centers could raise computing costs and threaten economic growth as demand for AI accelerates.

“If we don’t build out these data centers, it is actually more inflationary because the cost of compute is so high right now,” Fink said in an interview on Bloomberg Television Wednesday, on the sidelines of the Berlin Global Dialogue event. “And the faster we can build out more data centers, the more compute we have, the faster we can bring down the cost.”

Elsewhere, oil whipsawed after its settlement. The US State Department issued an ordered departure for non-emergency personnel and their families from Saudi Arabia because of the growing threat from Houthi militants in neighboring Yemen.

uploaded by Isabelle Francis