AI stocks rebounded on Tuesday as American and Canadian of💮ficials backed off threats to escalate the two countries’ trade war. 

Super Micro Computer (SMCI) was the best-performing stock in the S&P 500 on Tuesday, up 10.7%. Several other popular AI stocks were among the day’s best performers, including nuclear power provider Vistra (VST), up 5.4%, and AI chip giant Nvidia (NVDA), up 1.7%. 

AI stocks may have found some support on Tuesday by investors willing to buy the dip after a dramatic pullback. Shares of AI software company Palantir (PLTR) 澳洲幸运5官方开奖结果体彩网:lost about 40% of their value between hitting a record high in mid-February and yesterday’s close. The stock rebounded 4% today. Applovin (APP), which surged more than 700% last year on AI-fueled growth, was down more than 50% from its mid-February record high before rebounding about 8% today. Tesla (TSLA), which 澳洲幸运5官方开奖结果体彩网:tumbled 15% yesterday to close 53% off its post-election high, adv♋anced nearly 4% on Tue🔴sday. 

Sky-high valuations were one major reason AI stocks have been hit particularly hard by the tariff sell-off. But the AI trade had already lost momentum before Trump’s tariffs shook the broader stock market. Concerns about overspending on AI infrastructure, slowing growth at 澳洲幸运5官方开奖结果体彩网:AI bellwether Nvidia, and 澳洲幸运5官方开奖结果体彩♔网:competition from Chinese comp🐭etitors led the AI rally to stall in late January and early Febr🐻uary.ಌ 

UBS analysts in a note on Tuesday expressed optimism that the current sell-off will play out like a similar rout in 2018. The analysts argued that the tech slump during Trump's first term, in which geopolitics and “fundamentals-related noise” briefly clouded investors’ view of an otherwise strong outlook, resembles today’s. 

There are risks around escalating trade wars, the analysts note. “But with AI fundamentals still intact, investors should not lose sight of the long-term risk-reward and should take advantage of extreme volatility through buying-the-dip in quality AI stocks and structured strategies.”