Nasdaq 100 Hits Record on AI Stock Rally

Nvidia and Microsoft helped lead the advance. Nvidia rose after repeated swings earlier this year left the stock still well below its 2025 peak, while Microsoft’s rebound has been stronger, with the shares back near record territory after a sharp midyear drawdown.

The latest leg higher also fits a broader market tone of extreme greed. Adalytica’s S&P 500 trade signals show sentiment at 87, or “Extreme Greed,” while Bitcoin’s own fear-and-greed reading is also in extreme-greed territory, a sign risk appetite is spilling across assets rather than staying confined to equities.

For investors, the key question is whether the AI trade is becoming crowded again. The Nasdaq 100’s push to new highs can keep index funds and momentum strategies buying, but it also leaves the market more exposed if earnings, rates or AI spending plans fail to justify the recent multiple expansion.

That makes upcoming earnings from the sector, along with any shift in Federal Reserve expectations or bond yields, the main near-term test for the rally. If megacap tech keeps delivering and AI demand remains strong, the index has room to extend; if not, the summer’s volatility could return quickly.