Written by: Trend Research
The AI arms race is shifting from "whose chips are stronger" to "who can turn money into computing power the fastest."
On June 2nd, the market witnessed both sides of this coin: a casual remark by Jensen Huang at Taipei Computex drove Marvell's market value up by $47 billion in a single day, while Alphabet was forced to issue new shares for the first time in 20 years, raising $80 billion, all because its current profits can no longer feed the appetite of AI infrastructure.
One was being deified on stage, the other was selling its lifeblood off stage. This is the true face of the technology industry in 2026.
Major Indices All Close Higher: Three Major Indices Hit New Highs
On Tuesday, the S&P 500 closed at 7,609.78 points, up 0.13%, breaking the 7,600 mark for the first time in history. The Dow rose 229 points to 51,307.79 points (+0.45%). The Nasdaq edged up 0.03% to 27,093.90 points, also setting a new record.
But the most impressive performance wasn't from the large-cap blue chips. The Russell 2000 rose 0.90%, the biggest gainer among the four major indices. The resilience of small-cap stocks hints that market confidence in the economic fundamentals is not confined to those few trillion-dollar giants.
The S&P 500 has now risen for ten consecutive weeks (including the previous week). The last time such a winning streak occurred was during the AI rally that started at the end of 2024.
Semiconductor Night: Computex Becomes Wall Street's Remote Trading Floor
The semiconductor sector on June 2nd was ignited remotely by the Taipei Computex conference.
Marvell Technology (MRVL): +32.52%, marking the company's largest single-day gain in 26 years.
While sharing the stage with Marvell CEO Matt Murphy at Computex, Jensen Huang dropped six words: "The next trillion-dollar company, ladies and gentlemen."
This wasn't small talk. In March of this year, Nvidia invested $2 billion in Marvell, buying into its network interconnect and custom chip capabilities. Huang's logic is straightforward: when a computing task is split across thousands of chips in a data center, the "nervous system"—the interconnection network—between the chips becomes as critical as the chips themselves. Marvell builds that nervous system.
Calculated based on the closing price, Marvell's market cap soared from approximately $192 billion to around $255 billion in a single day. It's still five times away from the "trillion-dollar club," but the market clearly took Huang's words as a roadmap, not a courtesy.
The day before, on the opening day of Computex, Huang launched the RTX Spark superchip, Nvidia's first-ever PC processor, directly entering the territory of Intel and AMD, sending NVDA up 4.8%. By the next day, capital flowed from Nvidia to its "ecosystem members." This rotation itself tells a story: the marginal returns on AI investment are spreading from the "core" to the "periphery."
Hewlett Packard Enterprise (HPE): Surged about 25%, its largest single-day gain since going public.
HPE's Q2 earnings report was a classic "across-the-board beat": adjusted EPS of $0.79, versus Wall Street expectations of $0.53, beating by 49%; revenue of $10.68 billion, versus expectations of $9.79 billion, up 40% year-over-year. Server business revenue was $5.45 billion, nearly 20% above expectations.
More critical was the guidance: HPE raised its full-year EPS outlook from $2.30-$2.50 directly to $3.35-$3.45, adding a full dollar at once. CEO Antonio Neri said HPE is "two years ahead of its long-term financial plan."
HPE has been viewed by the market as a "relic of the old era" for years. The significance of this earnings report is that AI dividends aren't exclusive to Nvidia and chip designers; the "brick-and-mortar" server sellers are also feasting on the times.
Alphabet Sells Its Lifeblood to Raise Funds: The Anxiety Behind the $80 Billion Share Sale
The biggest bearish catalyst of the day was Alphabet's announcement of an $80 billion equity financing plan. The last time Google's parent company issued new shares was shortly after its 2005 IPO; it hasn't touched this path for 20 years.
The financing proceeds in three steps: Berkshire Hathaway subscribed to $10 billion at a discount (Class A shares at approximately $351.81 per share, Class C shares at approximately $348.20 per share); $30 billion will be issued publicly via underwriters (half of which are mandatory convertible preferred shares); an additional $40 billion will be sold gradually in the secondary market starting in Q3 via an "at-the-market" (ATM) offering.
Alphabet's reason was simple: capital expenditures in 2026 will exceed $180 billion, double that of 2025, and will be even higher in 2027. Even with Google's advertising and cloud businesses generating hundreds of billions in cash flow annually, it's no longer enough.
GOOGL closed down about 4% for the day. The market's worry isn't "Google is short of money," but rather "AI is burning money faster than anyone imagined." According to Goldman Sachs estimates, total AI-related capital investment by US tech giants in 2026 will reach approximately $800 billion. When even Alphabet needs to dilute equity to raise funds, investors are forced to recalculate: Is the endgame of this arms race winner-takes-all, or will everyone be crushed by capital expenditures together?
An investment banker offered a pithy remark to Al Jazeera: For hyperscale companies, "underinvestment is an existential threat, while overinvestment is merely expensive." This sentence accurately captures the current industry psychology: better to burn more money than fall behind.
Sector Divergence: AI Boosts Tech, Alphabet Weighs on Communications
Among the 11 sectors of the S&P 500, seven rose and four fell.
The Technology and Utilities sectors led the gains. Tech stocks were boosted by Marvell and HPE, with the semiconductor sub-sector generally strengthening (SOXX +5.79%). The rise in the Utilities sector was somewhat unexpected; after a 4.9% pullback in May, some funds started buying on the dip.
The Communication Services sector was the weakest of the day, completely dragged down by Alphabet alone. Alphabet holds too large a weighting in the S&P 500 Communication Services sector; once it falls, the entire sector struggles to recover.
The Financial sector fell slightly. Despite the new highs in the broader market, bank stocks are awaiting guidance from Friday's Nonfarm Payrolls and JOLTS Job Openings data.
Market Sentiment: Fear Index Runs Low, but Undercurrents Swirl
The VIX volatility index remained in the 15-16 range, near its yearly low, suggesting calm on the surface. The 10-year Treasury yield rose slightly to 4.46%, up 1 basis point from the previous day.
But two signals warrant caution:
First, Julian Emanuel of Evercore ISI pointed out, "Record concentration in AI names is driving the index higher while masking the side effects of a challenging geopolitical and consumer backdrop." Micron, Nvidia, and Alphabet contributed over 40% of the S&P 500's EPS revisions this year. There's a clear disconnect between the index's strength and the performance of the majority of stocks.
Second, on the geopolitical front, Iran announced the suspension of indirect talks with the US on the opening day of Computex, protesting Israeli military actions in Lebanon. Oil prices spiked during the session. Although Trump later stated on Truth Social that talks were still "progressing rapidly," the Middle East situation remains a Sword of Damocles hanging over the market.
After-Hours Focus: Palo Alto Networks Earnings Beat Expectations
Palo Alto Networks (PANW) rose over 8% in after-hours trading. The company's Q1 results exceeded analyst expectations, once again validating the resilience of cybersecurity spending. This is a positive signal for the tech sector at Wednesday's open.
Another heavyweight on the horizon: Broadcom (AVGO) will report Q2 earnings on June 3rd (Wednesday). As another key player in custom AI chips, Broadcom's results will directly test the market's most pressing question: "Is demand for AI chips still accelerating?"
Weekly Calendar: Nonfarm Payrolls to Determine Market's Next Move
Before Tuesday's open, April JOLTS Job Openings data was released, expected to remain stable around 6.8 million. But the real battle is on Friday with the May Nonfarm Payrolls report.
Market expectations for Fed policy are subtly shifting. With inflation stubbornly high, the probability of a rate hike by year-end has exceeded 60%. If the jobs data comes in strong, Treasury yields could rise further, putting pressure on high-growth stocks reliant on low-rate valuations.
But for now, the market's choice is: disregard interest rates for now, chase AI first.
