AI Stocks Rebound Amid Hedge Fund Activity; Johnson & Johnson Lowers Earnings Guidance
The Nasdaq Composite rose over 2.5% on Thursday, marking its best session in more than a month as AI-related stocks rebounded. The rally followed reports that Situational Awareness, an AI-focused hedge fund led by former OpenAI employee Leopold Aschenbrenner, had agreed to sell its public investments to Citadel. Jim Cramer noted this unwinding of leveraged bets could signal the bottom for AI stocks. Chipmakers Micron and Advanced Micro Devices surged over 17% and 13%, respectively, while ancillary players like Qnity and Corning also gained significantly. The Investing Club upgraded both to buy-equivalent ratings. However, software and healthcare stocks lagged as investors rotated back into AI names. Johnson & Johnson cut its full-year adjusted earnings guidance due primarily to acquisition-related R&D charges rather than operational issues. While the move caused a short-term sell-off, analysts argue it reflects strategic investments in emerging therapies like CAR-T technology.
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