London, 27 October 2026 — EBM Newsdesk Analysis — By Brad Adams
The AI trade is back. After weeks of nervous selling, global stock markets rallied as investors returned to the chipmakers and technology giants they had been dumping only days earlier.
On Wall Street on Monday, the Nasdaq rose 0.8% and the S&P 500 gained 0.7%, leaving it about 1.8% below its record high set earlier this month, according to AP. Nvidia climbed 2.4%, breaking a run of three straight weekly losses.
Asia’s Chipmakers Roar Back
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SubscribeAsia saw the sharpest moves. South Korea’s Kospi jumped 3.1% to a record 5,638, having risen more than 4% at one point. Japan’s Nikkei 225 gained 1.7% to a fresh high above 63,000. SK Hynix rose 5.2% and Samsung Electronics 4.2% ahead of their results this week. Samsung is expected to report a record operating profit of around 107 trillion won, roughly $80bn. Japanese chip-testing group Advantest soared almost 10%, and SoftBank rose 5%.
It is a striking turnaround. Just last week, chip stocks slid as Meta’s $145bn AI bill and rising borrowing costs spooked investors, extending a run of memory chip sell-offs. South Korea’s economy also helped sentiment, growing at an annualised 3.4% in the third quarter, faster than expected.
Not everywhere joined in. Hong Kong’s Hang Seng fell 0.6% and Shanghai slipped 0.3%, as investors awaited the outcome of a closed-door meeting of China’s Communist Party leaders.
The Money Keeps Flowing
The rally is fuelled by fresh evidence that the AI spending boom is far from over. Meta plans to raise $35bn by selling shares to fund its AI build-out, with Nvidia, AMD and Broadcom potentially buying $5bn between them. Elon Musk’s SpaceX, which now includes his AI business xAI, has struck a deal worth roughly $40bn to lease AI computing power through an entity managed by Apollo. Meanwhile, Anthropic has disclosed its losses ahead of a planned US stock market listing.
Oil has also eased, with Brent crude down 0.5% to about $110 a barrel, giving markets some relief from the energy pressures that dominated last week.
A Big Week of Tests
The rebound faces two big tests. Alphabet and Microsoft report results on Wednesday and Amazon on Thursday, and investors want proof that the hundreds of billions being spent on AI are starting to pay off. Microsoft’s offer of buyouts to 60,000 staff this week shows how hard even the biggest players are working to control costs.
The US Federal Reserve also meets on Wednesday, according to its published calendar. A hold is widely expected after last month’s first rate rise in three years. With ten-year Treasury yields close to 5%, high borrowing costs remain the biggest threat to the data centre and chip spending that drives the AI trade.
My Read
This rally shows how badly investors still want to believe in AI. A few deals and a strong week for chipmakers were enough to reverse weeks of selling. But the fundamentals have not changed: the AI build-out is enormously expensive, borrowing costs are near 5%, and ECB economists have warned the AI-fuelled boom is heading for a correction. This week’s Big Tech results matter more than any single day’s bounce. If Microsoft, Alphabet and Amazon show AI revenue growing fast enough to justify the spending, the rally can run. If not, expect the selling to return just as quickly.
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