It’s a risk-on rally in today’s market. The broader stock indices are higher, being led once again by the tech-heavy Nasdaq. Within this exchange, leading artificial intelligence (AI) stocks are providing investors with healthy gains, continuing the trend we’ve seen to start the year.
AI stocks SoundHound (NASDAQ:SOUN), BigBear.ai (NYSE:BBAI) and C3.ai (NYSE:AI) are up between 6% and 25%, at the time of writing. These moves signal that investors may still be keen on loading up on this area of the market, which clearly still has momentum moving forward.
Much of today’s bullish rally in AI stocks appears to be tied to the generative AI race heating up. Both Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Adobe (NASDAQ:ADBE) released AI products that the market appears to be viewing positively. With these juggernauts all entering the race, pure-play AI stocks are seeing their shares bid higher for a variety of reasons.
Let’s dive into what to make of today’s news.
Why Are AI Stocks Surging Today?
Alphabet’s Google has released Bard, its official AI chatbot. This release, which is expected to become available on a limited basis in the U.S. and U.K., has significant potential to grow over time. Notably, this project has been under development for three years. However, the mega-cap tech giant appears to feel that now is the time to release this project in beta, considering that OpenAI’s ChatGPT 3.0 has already captured the imaginations of so many users.
This news was accompanied by an announcement from Adobe. The tech company is launching its own generative AI product aimed at image generation. While this product launch will be focused on images, Firefly will eventually “allow content creators to use their own words to generate images, audio, illustrations, videos and 3-D images.”
These AI launches are certainly intriguing and likely to bolster investor interest in this high-growth space. Thus, these standalone, pure-play AI stocks are seeing relative interest increase. Investors are looking to value these companies as potential beneficiaries of a surge in this space (whether from investors or corporations looking to do acquisitions).
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.