Meanwhile, Amazon shares fell 5.6% after the company said it planned to increase capital expenditures by more than 50% this year, intensifying competition to lead AI technology and following a similar announcement from Alphabet earlier in the week.
Turning to chipmakers, Nvidia, the world’s most valuable company, rose 7.8%, while Advanced Micro Devices gained 8.3% and Broadcom climbed 7.1%, with the PHLX semiconductor index closing up 5.7%.
In broader market context, Friday’s gains in the S&P 500 and Nasdaq followed three consecutive days of declines linked to concerns about artificial intelligence.
Several software firms were pressured earlier in the week amid worries that AI could increase competition and compress margins, while investors also expressed caution about high valuations after years of strong gains in AI-related stocks.
"This trade has been volatile, and there have been selloffs at times, but I think there's enough evidence that there's real demand for AI products, real promise with what they can do, and a necessity of a lot of spending to get there," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.
"So when there's this kind of a selloff, I think there's a floor where there's going to be a certain set of investors that steps in and starts buying these names."
Shifting to software stocks, software and data services companies recovered from recent losses.
CrowdStrike and Palantir each rose more than 4%, while the S&P 500 Software & Services index gained 2.4%, ending seven consecutive sessions of declines despite posting a weekly drop of about 8%, its weakest weekly performance since March 2020.
Looking at broader market trends, the Dow outperformed the S&P 500 and Nasdaq during the week, reflecting investor diversification away from technology shares that have led markets in recent years toward companies that previously lagged those gains.
Similarly, the small-cap Russell 2000 index also advanced during the week.
Turning to index performance, the S&P 500 rose 1.97% to close at 6,932.30 points.
The Nasdaq gained 2.18% to 23,031.21 points, while the Dow climbed 2.47% to 50,115.67 points, marking its highest close on record.
Examining sector movements, nine of the 11 S&P 500 sectors advanced, led by information technology, which rose 4.1%, followed by industrials with a 2.84% increase.
The S&P 500 energy sector index reached a record high, alongside industrials and consumer staples.
For the week overall, the Dow gained 2.5%, the S&P 500 edged down 0.1%, and the Nasdaq declined 1.9%.
The S&P 500 remained less than 1% below its record closing high set the previous week, while the Nasdaq stood about 4% below its record close from last October.
Regarding volatility, the CBOE volatility index, often viewed as Wall Street’s fear gauge, fell for the first time in three days.
On earnings, more than half of S&P 500 companies have reported quarterly results, with roughly 80% exceeding analysts’ expectations, according to LSEG data, well above the typical beat rate of about 67%.
Among individual stocks, Molina Healthcare dropped 25.5% after forecasting 2026 profit at less than half of Wall Street expectations.
Roblox rose nearly 10% after projecting fiscal 2026 bookings above estimates.
Reddit fell 7.4% despite forecasting first-quarter revenue above analysts’ expectations.
Looking at market breadth, advancing stocks outnumbered decliners within the S&P 500 by roughly four to one.
The S&P 500 recorded 88 new highs and 13 new lows, while the Nasdaq logged 214 new highs and 181 new lows.
Finally, trading volume on US exchanges totaled 20.1 billion shares, compared with an average of 20.5 billion shares over the previous 20 sessions.