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The ongoing artificial intelligence frenzy that briefly made Nvidia Corp the world’s most valuable company this week also drove record inflows into tech funds, said Bank of America Corp strategists.

About $8.7 billion flowed into tech funds in the week through June 19, according to a note from the bank citing EPFR Global data.

“The ‘all roads lead to Nvidia’ trade is once again bolstered” as Europe falters amid the political turmoil in France, strategist Michael Hartnett said.

US stocks notched yet another record high this week as Nvidia hit $3.3 trillion in market capitalisation, briefly overtaking Microsoft Corp as the biggest company in the world.

A range of Wall Street strategists, including at Goldman Sachs Group Inc, have boosted their year-end targets for the S&P 500 Index in recent days. Still, while investors still feel they need more exposure to AI-related plays, “all asset allocators are concerned about the equity concentration risk,” said Hartnett.

At the same time, the rally in European stocks has faltered after the snap election call in France. European equity funds recorded a fifth straight week of outflows at $1 billion. Global equity funds, on the other hand, had additions of $25.6 billion, the biggest since March.

Meanwhile, US stocks drifted towards a quiet close of the week Friday, as Nvidia shares continued to cool from its startling run.

The S&P 500 was 0.2% lower in morning trading, though it was still near its all-time high set on Tuesday. The Dow Jones Industrial Average was up 49 points, or 0.1%, as of 10 am ET, and the Nasdaq composite was 0.3% lower.

Nvidia again was dragging on the market after falling 2.9%. Its stock has soared over 1,000% since October 2022 on frenzied demand for its chips, which are powering much of the world’s move into AI technology. Agencies

  • Published On Jun 22, 2024 at 01:04 PM IST

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