AI hyperscalers notched gains in early morning trading as Wall Street kicked off a new year of trading and maintained optimism that the AI and Big Tech boom will keep on growing.
“Magnificent 7” names such as chipmaking leader Nvidia (NVDA) and hyperscalers Oracle (ORCL) and Google (GOOG) picked up more than 1% in each in the early hours of trading before the opening bell on Friday.
A basket of AI-focused companies, including Meta (META), Microsoft (MSFT), and Amazon (AMZN), all gained upward of 0.5%.
The AI trade spent much of the second half of 2025 plagued by worries throughout the market that valuations were getting too lofty and spending was getting too out of control.
But the companies have persisted, and Wall Street strategists see it as largely unlikely that the biggest companies in the world are going anywhere. An ETF tracking the sector (XLK) returned more than 13.5% over the past six months.
The market is in for “another year of double-digit gains mirroring the late 1990s equity boom,” wrote Nicole Inui, HSBC head of equity strategy for the Americas, in the bank’s 2026 outlook.
“Back then, like today, tech is leading, return concentration is high, and a new technology is promising to be transformational. We expect equities to remain supported by the AI-led capex boom,” Inui wrote.
Goldman Sachs (GS) strategist Peter Oppenheimer told clients in an outlook note that while there is a risk of over-concentration and high valuations in the market, investor optimism may be able to override bearish narratives.
“Despite the higher-than-average valuations across equity markets, there is potential for upside risks to our central forecasts if investor optimism, driven by the AI and easing narratives, triggers further valuation expansion, in common with most optimism phases of bull markets.”