Prime Highlight

• Major technology stocks rebounded on Monday after a volatile week, signalling renewed investor confidence in long-term AI-driven growth.
• Analysts said short-term market swings have not weakened fundamentals, with demand for AI, cloud, and data infrastructure remaining strong.

Key Facts

• Oracle jumped 9% after a brokerage upgrade, while Microsoft rose 3%, and Nvidia and Meta gained more than 2% each in the session.
• Amazon, Alphabet, Microsoft and Meta spent about $120 billion in Q4, with total big-tech AI and data centre investment projected near $700 billion by 2026.

Background

Major technology stocks attempted a rebound on Monday, offering a positive signal to markets after a volatile week that erased more than $1 trillion from Big Tech market capitalisations. Oracle led the recovery, rising 9%, while Microsoft gained 3%, as investors showed renewed confidence in long-term growth linked to artificial intelligence.

Other large tech names also traded higher. Nvidia and Meta rose more than 2% each, while Alphabet edged up slightly. Amazon shares slipped marginally, but broader sentiment across the sector improved compared with last week’s sharp declines.

Oracle’s strong performance followed an upgrade by brokerage D.A. Davidson, which boosted investor optimism around the company’s growth prospects. The gains came after markets reacted nervously last week to rising capital expenditure plans announced by major technology firms as they expand AI infrastructure.

Amazon, Alphabet, Microsoft and Meta together reported capital spending of about $120 billion in the fourth quarter alone. Analysts estimate that total spending by large cloud and technology firms could approach $700 billion in 2026, underlining the scale of investment flowing into AI and data centres.

Despite short-term volatility, analysts remain constructive. Deutsche Bank said last week marked the worst period for the so-called “Magnificent Seven” stocks in months, but noted that the group had already begun stabilising by the end of the week. On Friday, these stocks closed higher overall, signalling early signs of recovery.

Market experts said company leaders remain confident. Bank of America Securities said cloud margins are improving, and company leaders expect capacity to stay fully used in 2026. Nvidia CEO Jensen Huang also said higher AI investment makes sense because demand for computing power remains strong.

Analysts at Morgan Stanley added that accelerating cloud usage and data centre demand could continue to support higher investment levels, reinforcing a positive long-term outlook for the sector.