New York Stocks Surge as Google Redraws AI Landscape—Nasdaq Closes Up 2.7%

(New York=Yonhap Infomax) Jeong Ho Jin—The three major U.S. stock indices closed sharply higher, led by strong buying in technology shares.

Investor enthusiasm swept across the tech sector after Google unveiled its Gemini 3.0 artificial intelligence (AI) service, signaling a potential shift in the AI industry’s direction.

On the 24th (U.S. Eastern Time), the Dow Jones Industrial Average ended up 202.86 points, or 0.44%, at 46,448.27 on the New York Stock Exchange (NYSE).

The S&P 500 rose 102.13 points, or 1.55%, to close at 6,705.12, while the Nasdaq Composite soared 598.92 points, or 2.69%, to finish at 22,872.01.

Despite the typically subdued trading ahead of the Thanksgiving holiday, optimism fueled by Google’s AI breakthrough proved hard for investors to ignore.

Positive reviews of Gemini 3.0 ignited a rally across the technology sector. Notably, as competitors in the AI space praised Gemini’s performance, shares of Alphabet Inc., Google’s parent company, surged.

Sam Altman, CEO of OpenAI, commented after experiencing Gemini 3.0, “Now we’re the ones playing catch-up,” admitting that the outlook for his company may be challenging in the near term. Tesla CEO Elon Musk also acknowledged Gemini’s achievement, posting a rare “Congratulations” on his X account.

The market’s reaction was particularly strong as Gemini 3.0 is seen as opening new possibilities for the AI industry. Previously, AI tools centered around OpenAI were heavily reliant on Nvidia’s graphics processing units (GPUs), raising concerns over the high costs of purchasing, maintaining, and depreciating GPUs.

In contrast, Google built the Gemini system around its proprietary AI chip, the Tensor Processing Unit (TPU), significantly reducing external expenditures. With major AI services having largely completed their training phases, expectations are rising that TPUs—known for their inference capabilities—will become increasingly important.

As a result, Google is now regarded as the only major tech company to have vertically integrated both AI hardware and software. Having outpaced OpenAI with its own chips rather than relying on Nvidia’s GPUs, expectations are mounting that Google could reshape the AI industry landscape.

Marc Benioff, founder of Salesforce, remarked, “I’ve used ChatGPT daily for three years, but only spent two hours with Gemini 3.0—and everything, from reasoning and speed to image and video, is sharper and faster. It’s a remarkable leap forward, and I won’t be going back [to ChatGPT].”

Buoyed by this optimism, Alphabet shares jumped more than 6% on the day, bringing their two-day gain close to 10%. The company’s market capitalization surpassed $3.83 trillion, overtaking Microsoft’s $3.51 trillion to become the third-largest on the U.S. stock market.

The tech rally also lifted Nvidia and Microsoft by 2.05% and 0.40%, respectively. However, in early trading, investor sentiment toward Nvidia and Microsoft—both with significant exposure to GPU-centric AI and OpenAI—was subdued amid Gemini’s rise.

The Philadelphia Semiconductor Index surged 4.63% on the back of Gemini’s momentum. Broadcom soared 11.10%, overtaking TSMC for the No. 2 spot by market cap within the index. TSMC rose 3.48%, ASML gained 2.20%, AMD climbed 5.53%, and Micron Technology advanced 7.99%.

Broadcom is a key partner for Google in manufacturing TPUs, and its strong performance signals a potential shift in the AI chip market landscape.

However, Melissa Brown, Director of Applied Research at SimCorp, cautioned, “It’s good news for Alphabet and its investors, but when a single stock drives the market higher, it’s a concern. I don’t think this alone will sustain the market’s momentum for days to come.”

By sector, communication services jumped 3.94%, technology gained 2.49%, consumer discretionary rose 1.86%, and utilities added 1.12%. Consumer staples fell 1.32%.

Eli Lilly rose 0.99%, pausing after surpassing a $1 trillion market cap for the first time last week.

On the back of strong tech buying, Tesla climbed 6.82% and Meta Platforms advanced 3.16%.

Conversely, Walmart fell 1.20%, lagging amid the rotation into growth stocks. Costco dropped 1.43%, and Home Depot declined 1.96%.

According to CME FedWatch Tool, the federal funds futures market priced in an 85.1% probability of a 25 basis point rate cut in December, up from 71.0% at the previous session’s close. The shift followed dovish comments from Federal Reserve Governor Christopher Waller and San Francisco Fed President Mary Daly, both supporting a December rate cut.

The CBOE Volatility Index (VIX) fell 2.91 points, or 12.4%, to 20.52.

jhjin@yna.co.kr

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