Key Highlights

● Broadcom rose in lockstep with Nvidia, which closed at a record with a market value of about $5.7 trillion.

● Microsoft and Meta Platforms also climbed as AI sentiment stayed strong.

● Intel and GlobalFoundries fell, showing a mixed day across chipmakers.

Broadcom rose on Monday, Oct. 5, matching Nvidia's gain as AI chip stocks helped drive the Nasdaq to a record close.

Riding the AI wave

Broadcom (NASDAQ:AVGO) rose on Monday, moving in lockstep with Nvidia (NASDAQ:NVDA) as investors once again piled into the biggest AI chip names. Both stocks gained by about the same amount, according to market reports.

The move was part of a wider push into mega-cap AI stocks that carried the Nasdaq Composite and Nasdaq-100 to records.

Nvidia set the tone

Nvidia led the charge. It closed at a record of about $238.90, giving it a market value of about $5.7 trillion. The Associated Press called Nvidia "the single strongest force lifting the S&P 500."

Broadcom plays a different role in the AI build-out. It designs custom AI accelerators for big cloud and internet companies and supplies much of the high-speed networking silicon that links thousands of chips together inside data centres. It also owns a large infrastructure software business. When investors grow more confident about AI spending, Broadcom and Nvidia often move together.

Microsoft (NASDAQ:MSFT) added to the upbeat mood for AI after Melius Research upgraded it to Buy with a $665 target, calling the company "the adult in charge" on AI security and governance. Meta Platforms (NASDAQ:META) also climbed.

A mixed day for chips

Not every chipmaker shared in the gains. Intel (NASDAQ:INTC) fell after Elon Musk confirmed preliminary talks for Taiwan Semiconductor Manufacturing (NYSE:TSM) to join Terafab, his Texas chip-manufacturing venture, where Intel has been the only manufacturing partner since April. "Just discussions, but something may come of it," Musk said. TSMC's US-listed shares climbed on the news.

GlobalFoundries (NASDAQ:GFS) slid after BNP Paribas Exane downgraded it to Neutral, and United Microelectronics (NYSE:UMC) tumbled. AMD (NASDAQ:AMD) dipped. Hard-drive makers Western Digital (NASDAQ:WDC) and Seagate (NASDAQ:STX), meanwhile, rebounded after analysts dismissed worries about Toshiba's capacity plans.

Narrow but powerful leadership

The broader market finished higher. The Nasdaq Composite rose 286.45 points to a record close of 27,477.31, and the Nasdaq-100 set a record at 31,076.44. The S&P 500 gained 51.23 points to 7,773.95, just shy of its summer record, and the Dow Jones Industrial Average added 90.94 points to 51,267.90.

Gains on the Nasdaq were concentrated in the largest names. The index posted 57 new highs against 243 new lows, a sign of narrow leadership even on a record day.

Big tech rose despite rising bond yields. The 10-year Treasury yield climbed to its highest close since 2002, and the ISM services survey showed prices paid at their highest since July 2022. Friday's weak jobs report, with only 29,000 positions added in September, cut the odds of another Fed rate hike in October to roughly one in four or less.

Daniela Hathorn of Capital.com said: "growth stocks are rallying because Fed expectations have softened, while the risk-free rate against which those valuations are judged remains exceptionally high."

Oil eased, with Brent settling at $100.32 a barrel.

What to watch

For Broadcom, the next major checkpoint is its quarterly earnings report, where investors will look for updates on demand for its custom AI chips and networking products. Any news on AI spending plans from large cloud customers could also move the stock.

On the macro calendar, the Fed releases minutes of its September meeting on Wednesday, Oct. 7, at 2 p.m. ET. PepsiCo reports Thursday and Delta Air Lines Friday. Bank earnings begin on Oct. 13, and the Fed's next policy meeting is Oct. 27–28.