The Nasdaq index is soaring as AI stocks lead an early rally on December 22, 2025. Tech giants have surged following the blockbuster Oracle TikTok deal announcement and optimism about chip shipments to China. Wall Street is showing signs of life as traders aim for a year-end Santa Claus rally.
🔥 Quick Facts
- The Nasdaq Composite rose 1.3% or 301.26 points to close at 23,307.62 on Friday as AI stocks rebounded
- The S&P 500 gained 0.8% to 6,834.50 while the Dow advanced 0.4% to 48,134.89
- Oracle jumped 6.6% after agreeing to lead a new joint venture for TikTok‘s U.S. operations alongside Silver Lake and MGX
- NVIDIA climbed 3.9% on reports it may begin shipping H200 chips to China by mid-February at approved rates
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The tech-heavy Nasdaq Composite closed at 23,307.62 on Friday, rising 1.3% on strong AI performance. This marked a significant comeback after recent volatility plagued the market. The S&P 500 followed with a solid 0.8% gain to 6,834.50, closing a holiday-shortened week on a positive note.
Wall Street traders are positioning for what many call a potential “Santa Claus rally” over the final trading days of 2025. Trading volume was elevated at 24.60 billion shares, well above the 20-session average of 17.19 billion. The VIX volatility index declined 11.6% to 14.91, signaling reduced market anxiety heading into the final week.
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Advancing issues outnumbered decliners on both major exchanges. The NYSE saw a 1.44-to-1 advance ratio while the Nasdaq posted 1.47-to-1 gains. Technology stocks led the charge with the tech Select Sector SPDR (XLK) climbing 1.5% as investors regained confidence in AI-related equities.
Oracle TikTok Deal Ignites Tech Giant Rally
The biggest news catalyst came from the Oracle TikTok joint venture agreement, announced on December 18, 2025. The company will form a new U.S. entity controlled by Oracle Corp., Silver Lake, and Abu Dhabi-based MGX. Under the structure, ByteDance retains 19.9% ownership while the three American firms hold 15% each, with remaining shares held by other U.S.-based investors.
| Company/Investor | Ownership % | Role |
| Oracle Corp | 15% | Primary tech operator, handles data oversight |
| Silver Lake | 15% | Private equity partner |
| MGX (Abu Dhabi) | 15% | Strategic investor from Middle East |
| ByteDance (retained) | 19.9% | Original owner, reduced stake |
| Other U.S. Investors | 35.1% | Remaining American investor base |
Oracle shares jumped 6.6% following the announcement, with additional upside potential ahead. The deal is expected to close on January 22, 2026, giving TikTok a pathway to avoid a potential U.S. ban while maintaining operations. Wells Fargo reiterated an overweight rating on Oracle stock with a $280 price target, suggesting nearly 50% upside from Friday’s close.
AI Chip Leaders Surge on China Export Optimism
NVIDIA Corporation climbed 3.9% after Reuters reported the company is targeting mid-February shipments of its H200 AI chips to China. The company aims to deliver between 5,000 and 10,000 chip modules, representing approximately 40,000 to 80,000 individual H200 chips. President Donald Trump approved NVIDIA‘s ability to sell high-end AI chips to “approved customers” in China if the U.S. receives a 25% cut of proceeds.
Micron Technology jumped 7% as investors priced in strong fiscal first-quarter 2026 earnings results. Management expects even better performance in the second quarter. The VIX fell sharply, confirming that risk appetite has returned to the market after weeks of uncertainty. Both NVIDIA and Micron maintain Zacks Rank #1 (Strong Buy) designations from analysts.
The tech sector broadly participated in Friday’s rally. Google advanced 1.6%, Intel gained 1.49%, and Advanced Micro Devices (AMD) surged 6.15%. Semiconductor stocks benefited particularly from the China export narrative and optimism surrounding AI infrastructure expansion globally.
Market Recovery Amid Holiday-Shortened Trading Week
Wall Street entered a shortened holiday week as the New York Stock Exchange will close early on Wednesday, December 24 at 1 p.m. ET and remain closed on Thursday, December 25 for Christmas. This creates a condensed window for year-end positioning and potential year-end rally scenarios.
The Consumer Discretionary Select Sector (XLY) climbed 1.5%, Utilities Select Sector (XLU) gained 1.3%, while the Energy Select Sector (XLE) declined 1.5%. Six of the eleven broad market sectors ended positive, showing broad participation in Friday’s rally. Investors remain cautiously optimistic about whether the market can sustain momentum through year-end closing.
The weekly performance showed mixed results overall. The S&P 500 and Nasdaq Composite each gained 0.1% and 0.5% for the week, respectively, marking their third winning week in four. However, the Dow Jones Industrial Average fell 0.7% for the week, snapping a three-week winning streak due to rotation out of large-cap names.
Can AI Stock Leadership Hold Through Year-End?
The critical question facing investors is whether AI stocks can maintain their December leadership through the final trading days of 2025. Recent performance saw significant volatility as traders rotated between tech and value positions. Concerns about elevated valuations in the tech sector continue to weigh on sentiment, with some analysts questioning whether current prices reflect achievable growth rates.
Economic data released Friday showed mixed signals. The University of Michigan consumer sentiment index came in at 52.9 for December, below the preliminary estimate of 53.3. Short-term inflation expectations fell to 4.2%, the lowest reading in 11 months. Existing home sales fell 0.5% to 4.13 million units in November, slightly below expectations, suggesting cooling demand in the housing sector.
Traders are positioning for the coveted Santa Claus rally, which historically occurs between the last five trading days of the year and the first two trading days of the new year. The S&P 500 has recorded an average gain of 1.3% over this seven-day period since 1950. Success will depend on whether AI momentum can overcome valuation concerns and economic headwinds in the coming days.
Sources
- NASDAQ – Stock Market News for December 22, 2025
- CNBC – S&P 500 Futures Rise to Start Holiday-Shortened Week
- Reuters – Oracle TikTok Joint Venture Deal Documentation
Patrick Graham is a business and finance journalist translating Wall Street’s complexities into stories that matter to everyday readers. With extensive experience in financial journalism and economic analysis, this expert journalist provides sharp insights on market trends, corporate developments, and the economic forces affecting daily life. His reporting helps readers make sense of the business world’s biggest moves.