This week’s standout in the market: Technology stocks have achieved their most significant increase in almost two years.

Investors who took advantage of the recent dip in technology stocks are now seeing significant returns. As the market rebounded towards the end of the week, nearing record highs, major players in artificial intelligence like Nvidia and Microsoft emerged as top performers. Nvidia’s stock surged by 19% over five days, while Microsoft saw a 3% increase. Apple also experienced a 4% rise in its stock value. Overall, the Technology Select Sector SPDR Fund (XLK) gained over 7%, marking its best week since November 2022 and bringing it within 7% of its all-time high. This week has been particularly positive for investors seeking confirmation of economic stability, with stocks recovering from the early August sell-off. The S&P 500 also saw a 4% gain, now just 2% shy of its July peak.

Gene Munster, managing director at Deepwater Asset Management, noted that the fundamental appeal of AI remains strong despite some companies facing criticism for increased capital expenditures on AI projects. “The core AI trade hasn’t changed, but the speed of the market’s recovery was unexpected,” Munster told CNBC. He emphasized that investors needed this period of mental reset. The upcoming test for the tech stock rebound will be Nvidia’s second-quarter results on August 28. Munster explained that the recent market optimism is largely driven by expectations surrounding Nvidia’s announcement. He added that even if Nvidia reports a delay in its Blackwell AI chip, it could still be seen as a positive sign if the company anticipates significant future growth. “If they announce a delay but still project a substantial ramp-up, investors are likely to remain patient,” Munster said.