US stocks saw a notable rebound in risk appetite on Thursday, with high-beta growth names once again leading the charge across the market.

At the intraday high, all three major US indices were up more than 1%, while AI data cloud leader Snowflake briefly surged nearly 26% following its strong earnings report. Bloom Energy, a beneficiary of the AI infrastructure boom, climbed as much as 10%, and Tesla Motors rose nearly 8% ahead of its Cybercab unveiling. Cryptocurrency-related names such as Strategy also posted double-digit gains.

Two forces fueled this high-beta rally: Dell Technologies and Snowflake delivered back-to-back earnings beats that reinforced confidence in AI infrastructure and enterprise demand, while Federal Reserve Governor Christopher Waller struck a relatively dovish tone, signaling he would favor holding rates steady if August inflation data continues to improve. That shift cooled expectations for a September rate hike, pushed Treasury yields lower, and opened the door for high-valuation, high-volatility growth stocks to rally.

However, the AI trade was not uniformly rewarding. Broadcom, despite a 221% year-over-year surge in AI semiconductor revenue and an overall earnings beat, saw its shares drop as much as 6.8% intraday after its fourth-quarter revenue guidance came in slightly below consensus and its AI revenue outlook only marginally exceeded estimates. This suggests that after a massive run-up, the market is demanding even faster earnings delivery from AI names.

Dell Kicks Off The Rally: Record AI Server Orders And A Big Guidance Raise

The fundamental catalyst for this rally began with Dell Technologies' earnings released after Tuesday's close. The company reported second-quarter revenue of $47 billion, up 58% year over year, and non-GAAP EPS of $7.04, a 203% jump. More importantly, its AI-optimized server business continued to explode: revenue in that segment hit $16.4 billion, up 100% year over year, with record AI server orders of $60.9 billion and a backlog of $95 billion at quarter's end.

Driven by accelerating AI demand, Dell sharply raised its fiscal 2027 guidance, lifting full-year revenue expectations from $167 billion to $192 billion and boosting its AI-optimized server revenue forecast from $60 billion to $74 billion. Non-GAAP EPS guidance was also raised from $17.90 to $25.50.

These numbers sent a clear signal to the market: AI capital spending is not cooling off, and it is increasingly flowing into servers, networking, and data center infrastructure. This formed the backdrop for Thursday's high-beta rally, as investors rotated into names with greater earnings elasticity within the AI investment cycle, rather than sticking solely to traditional mega-cap tech stocks.

At its intraday high on Thursday, Dell rose 7.8%, bringing its cumulative gain from Tuesday's close to nearly 25% by the height of Thursday's session.

Snowflake Adds Fuel: AI Becomes A New Software Growth Engine

Following Dell, AI data cloud leader Snowflake delivered a robust earnings report after Wednesday's close. The company posted second-quarter product revenue of $1.49 billion, up 37% year over year, beating expectations, and raised its full-year product revenue guidance to $6.07 billion, up from $5.84 billion previously.

What drew even more attention was the acceleration in its AI business. CEO Sridhar Ramaswamy stated that AI contributed roughly half of the recent growth acceleration. New products like the AI coding assistant Cortex Code and the enterprise chat tool CoWork are seeing rapid adoption. At least 34 brokerages raised their price targets on Snowflake following the report, underscoring how AI product demand is boosting overall growth.

The market reaction was highly positive, with Snowflake climbing more than 25.7% at its intraday high, making it one of the day's standout performers. The rally spread across AI software names: ServiceNow rose 7.5%, Salesforce gained 4.4%, and Adobe advanced nearly 4.8% at their respective intraday highs.

This reflects a broader thesis than just "AI server demand is strong." Investors are now betting that AI capital spending is not only benefiting hardware makers like Nvidia, Dell, and Broadcom, but is also increasingly translating into revenue growth for enterprise data, cloud, and software companies.

Broadcom's Paradox: Stronger Results, Falling Shares

Yet, while Snowflake ignited software stocks, Broadcom, which also reported after Wednesday's close, told a different story. The company posted fiscal third-quarter revenue of approximately $29.6 billion, up 86% year over year, with AI semiconductor revenue surging 221% to $16.7 billion, up 54% sequentially—clearly beating expectations.

However, the stock fell against the grain. The issue was the next quarter's outlook. Broadcom guided for fiscal fourth-quarter revenue of about $34.8 billion, slightly below the ~$35 billion consensus, and projected AI revenue of roughly $21.7 billion, which, while robust, only modestly exceeded estimates.

As a result, Broadcom shares fell nearly 6.8% at Thursday's early-session low before paring losses to close down less than 3%.

This is a notable divergence: 221% AI semiconductor growth and an earnings beat still resulted in a sharp selloff. It does not signal a sudden bearish turn on AI; rather, it highlights the rising bar for AI trades. For core AI names trading at elevated valuations, merely beating expectations is insufficient—the market now demands stronger forward guidance, greater growth visibility, and faster earnings conversion.

Waller's Key Signal: Holding Steady If Inflation Cooperates

The further boost to risk appetite on Thursday came from a shift in Fed policy expectations. Governor Christopher Waller indicated that if August inflation data continues the improvement seen in June and July, he would support maintaining current interest rates; however, he would still consider rate hikes if inflation rebounds noticeably.

While Waller kept the door open for hikes, the market focused on his changed stance. Nick Timiraos, the journalist known as the "Fed whisperer," noted that Waller's position has subtly shifted: previously more concerned about inflation risks and favoring hikes, he now appears relatively more optimistic and leans toward holding rates steady if inflation data remains cooperative.

This is significant for markets. Earlier hawkish signals from Warsh at Jackson Hole had pushed short-end Treasury yields higher and reintroduced rate-hike risk. Waller's latest comments partially offset that tightening pressure.

Market pricing adjusted quickly. On Thursday, the implied probability of a 25 basis point rate hike in September fell from nearly 70% the previous day to around 50%. The 10-year Treasury yield also retreated from recent highs near 4.8%, dipping to around 4.75%.

For high-beta growth stocks, this provided both fundamental and valuation tailwinds simultaneously.

Broad Risk-On Rotation: From Snowflake To Robinhood

With upward rate pressure easing, capital flowed from AI core assets into higher-volatility, higher-beta names. Cryptocurrency-related stocks were particularly active: Robinhood surged nearly 17%, Strategy gained 15.4%, and Coinbase rose 11.9% at their intraday highs, supported by Bitcoin recovering to around $80,000.

Alongside this, Tesla Motors climbed nearly 7.6% at its session high, Meta added about 4.5%, and Nvidia advanced around 2.7%.

This is no longer just an "AI earnings trade"—it increasingly resembles a classic return of high-beta risk appetite. For Tesla, there was also a company-specific catalyst: the upcoming Cybercab event, with expectations that autonomous driving and Robotaxi narratives could serve as new valuation drivers.

AI Data Center Power Crunch Re-Ignites Interest In Bloom Energy

Another high-beta name worth noting is Bloom Energy, which rose more than 9.7% at its intraday high, significantly outperforming the broader market and many comparable fuel cell stocks.

The market is not just trading on traditional clean energy themes; it is focusing on the power bottleneck facing AI data centers. As AI compute infrastructure expands rapidly, demand for reliable electricity grows, while grid expansion and interconnection in parts of the US take time. Bloom Energy's on-site fuel cell power solutions are seen by some investors as a potential answer to this "power shortage" problem.

Analysts at 247 Wall St also noted that Bloom Energy's rise on Thursday was partly driven by the overall risk-on mode, combined with renewed attention to AI data center power demand.

Thus, Bloom Energy's rally represents another AI trade chain: AI compute expansion leads to surging data center power demand, which creates grid supply bottlenecks, driving demand for on-site generation, and channeling capital into high-beta power stocks.

This logic explains why Thursday's flows extended beyond AI chip giants like Nvidia into AI infrastructure, power, and even fuel cell names with higher elasticity.

Waller's Dovish Shift Is Just A Catalyst; Friday's Jobs Report Is The Next Test

As of Thursday's session, the high-beta surge should not be misread as a full Fed pivot to easing. Waller's core condition remains "if August inflation continues to improve." The August CPI report is due on September 11, just ahead of the September 15-16 FOMC meeting, making it a key determinant of policy direction.

Additionally, Friday's US employment data will continue to shape market expectations of the Fed.

Therefore, a more accurate description of Thursday's trade is not a full return of "rate cut trades," but rather a cooling of "rate hike trades." With Dell and Snowflake's strong earnings reviving confidence in AI growth, and Waller's comments easing concerns over further Fed tightening, capital flowed back into high-beta assets like Snowflake, Robinhood, Strategy, Coinbase, Tesla Motors, Bloom Energy, and Palantir.

But Broadcom's decline serves as a reminder: risk appetite can return quickly, yet the valuation bar for AI trades remains high.