Recent advances in artificial intelligence are fueling optimism over how businesses can operate more productively in the years ahead. They are also providing a big boost to the stock market.

The S&P 500’s 9 per cent rally this year has been driven by a handful of the index’s biggest stocks, a number of which are at the center of the AI frenzy that has spread in the wake of the chatbot sensation ChatGPT.

Five stocks – Microsoft, Google parent Alphabet, Nvidia, Apple and Meta Platforms – are responsible for the S&P 500’s entire year-to-date return, said Jessica Rabe, co-founder of DataTrek Research. About 25 per cent to 50 per cent of those gains are owed to “the buzz around artificial intelligence,” she noted.