AI breaks the curse of the U.S. stock market's decline in September. Wall Street shouts "All in AI", and the new valuation point for the U.S. stock market is 7000.

At the beginning of the U.S. stock market session, Bitcoin faced a large - scale liquidation. More than $1.5 billion worth of long positions were forcibly closed, and its price dropped by over 2% in 24 hours. The turmoil in the cryptocurrency market triggered risk - aversion sentiment among investors. Affected by this, the three major U.S. stock indexes all opened lower. Among them, the Dow Jones Industrial Average once fell by 0.2%.

However, at noon, NVIDIA announced that it would invest up to $100 billion in OpenAI for computing power construction. As soon as the news came out, NVIDIA's stock price quickly reversed from a 1.1% decline at the beginning of the session to a gain, and its intraday increase once expanded to over 4.5%. NVIDIA's strong performance drove the entire technology sector and led the broader market to reach a new high.

NVIDIA's strong performance drove the entire technology sector. As of the close, the S&P 500 Index rose 0.44%, the Dow Jones Industrial Average rose 0.14%, and the Nasdaq Composite Index rose 0.70%. The three major indexes reached new all - time highs for the third consecutive trading day. NVIDIA closed up more than 3.9%, hitting a record closing high.

Notably, against the backdrop of the three major stock indexes reaching new highs, the "fear index," the VIX volatility index, also rose 4.14%. This indicates that despite the overall market rally, some investors are still hedging through tools such as options, showing that the market sentiment is not entirely optimistic and there is a certain degree of caution.

This chart depicts an idealized "infinite capital flow cycle" model, the core of which lies in a self - reinforcing ecosystem. In this cycle:

• OpenAI will invest $100 billion in Oracle to purchase its infrastructure services for training and running its artificial intelligence models.
• To meet OpenAI's huge demand for computing power, Oracle will then use a portion of this funds to purchase chips from NVIDIA.
• After receiving this revenue, NVIDIA will invest $100 billion back into OpenAI to fund its further research, development, and expansion.

This process forms a continuous cycle, with capital constantly flowing among OpenAI, Oracle, and NVIDIA.

Oracle spends $100 billion on NVIDIA chips. NVIDIA invests $100 billion in OpenAI. OpenAI then spends $100 billion on Oracle for AI infrastructure construction.

The AI Boom Drives an Epic Bull Market in U.S. Stocks

Driven by the strong impetus of AI, the bullish sentiment on Wall Street is heating up at an unprecedented pace. Financial giants represented by Goldman Sachs generally believe that the bull market in U.S. stocks is far from over and have raised their outlooks for the future market.

Goldman Sachs: Don't Fight the "Super Bull Market"

Tony Pasquariello, the head of Goldman Sachs' hedge - fund business, clearly pointed out in the latest report that when the Federal Reserve shifts to cutting interest rates while the economy is resilient and the stock market is at a high level, the market environment is usually very favorable.

He emphasized that with the impetus of AI, the main trend and tone of the global stock market still remain upward. He advised investors to firmly hold the stocks they are optimistic about and stated that he prefers the Nasdaq 100 Index over the Russell 2000 Index. At the same time, he suggested using options to manage risks.

Pasquariello further warned that although the current positions may be relatively high, the upward momentum of AI technology stocks shows no sign of slowing down. He said bluntly, "Do I think you should stand in front of this 'Super Bull Market Freight Train' of U.S. mega - cap technology giants? I don't think so." These words clearly convey the signal of not going against the bull market of large - scale technology giants.

Wall Street's New Target: 7,000 Points Becomes the "New Anchor"

With strong corporate earnings data and the reignited market enthusiasm for AI driving the U.S. stock market to rise continuously since April, top Wall Street analysts are competing to raise their annual targets for the S&P 500 Index. Analysts who have been bearish for a long time are also discarding their previous research reports to catch up with this epic bull market.

• Deutsche Bank: Analyst Binky Chadha raised the year - end target for the S&P 500 Index to 7,000 points, which means there is still a gain of more than 7% from the current level.
• Wells Fargo: The analyst team expects the bull market in U.S. stocks to continue next year and predicts that the S&P 500 Index will rise 11% by the end of next year. Ohsung Kwon, the new chief analyst at Wells Fargo, said, "There is a bubble, but as long as the AI capital expenditure of technology giants continues to expand, the bull market should continue."
• Goldman Sachs: The latest report from the institution raised its expected returns for the S&P 500 Index over the next 6 months and 12 months to 5% and 8% respectively, corresponding to target points of 7,000 and 7,200 respectively.
• Evercore ISI: Analyst Julian Emanuel has a more optimistic long - term outlook. He expects that driven by the "once - in - a - generation" AI technological revolution, the S&P 500 Index will climb to 7,750 points by the end of 2026. He even proposed a more radical scenario of an "AI - driven asset bubble" and predicted that the index could climb to 9,000 points.

These forecasts indicate that 7,000 points has become the general expectation of Wall Street for the S&P 500 Index and is even regarded as a new "anchor point."

Strong Fundamental Support

Wall Street's bullish sentiment is not unfounded but is supported by solid fundamentals. Recently, the prices of global DRAM and NAND storage have soared, and the strong earnings and future outlooks announced by cloud - computing giant Oracle and AI ASIC chip giant Broadcom have significantly strengthened the "long - term bull market narrative" of the AI computing power infrastructure sector.

The computing power demand brought by generative AI applications and AI agents at the inference end is regarded as a vast opportunity, which is expected to drive the AI computing power infrastructure market to grow exponentially.

NVIDIA CEO Jensen Huang has also said that the "AI inference system" will be the largest source of NVIDIA's future revenue.

Thanks to the epic stock price rallies and continuously strong earnings of large - scale technology giants and leaders in the AI industry chain such as NVIDIA, Meta, Google, Oracle, TSMC, and Broadcom, the global stock market has been swept by an AI investment boom, driving the S&P 500 Index and the MSCI World Index to continuously reach new all - time highs since April.

Market Mentality: Positively Bullish with Caution

Although the bullish sentiment has pushed some global stock benchmarks into the overbought zone, Goldman Sachs' data shows that while hedge funds are actively trading to seek profits, they still show some hesitation in chasing high prices. This indicates that although the long positions in the market have increased, "few people are taking excessive risks," and the market still has the ability to absorb new funds.

This is consistent with Pasquariello's view: the current market is facing a positive situation where positions are relatively high but the momentum remains strong. Investors should remain bullish while using tools such as options to manage risks.

This article is from the WeChat official account "U.S. Stock Investment Network" (ID: tradesmax), author: StockWe.com, published by 36Kr with authorization.