The Nasdaq experiences one of its best days in 2024, thanks to the leadership of Tesla and Nvidia.

• The interest rate cut by the Federal Reserve led to a rally in tech stocks, but it took an additional day to occur.
• On Thursday, Nvidia and AMD both experienced gains, with Nvidia increasing by 4% and AMD rising by 5.7%, while Tesla saw a more substantial growth of 7.4%.
• The tech-heavy Nasdaq is now up 20% for the year.

The day after the Federal Reserve cut its benchmark interest rate for the first time since 2020, tech stocks experienced a surge in investment from investors at a rapid pace.

On Thursday, the Nasdaq experienced a 2.5% increase, its fourth-largest gain of 2024, driven by a 7.4% increase in shares of and a 4% jump in . The biggest gain of the year for the tech-heavy index was a 3% increase on Feb. 22.

Lower interest rates can benefit tech stocks by making risky investments more attractive, as borrowing costs and bond yields decrease. The Federal Open Market Committee has indicated that it will reduce interest rates by 50 basis points by the end of the year, with a potential reduction of 2 percentage points beyond Wednesday's move.

Despite the Nasdaq's consistent growth this year, fueled by Nvidia and AI excitement, Thursday's surge propelled the index to its highest point since mid-July. The Nasdaq reached a peak of 18,647.45 on July 10 and is now only 3.5% away from that level, ending the day at 18,013.98.

Nvidia, whose processors are driving the generative AI industry and services like OpenAI's ChatGPT, experienced a 4% increase in stock price to $117.87 on Thursday. Despite this, the shares have risen by 138% year-to-date, although they are still 13% below their all-time high reached in June.

Nvidia's revenue heavily relies on a limited number of customers, including , , , , and OpenAI, who are either developing large language models or hosting big AI workloads. Any indication of decreased demand from these customers causes concern about Nvidia's stock performance.

But lower rates are seen as another potential boon.

On Thursday, fellow chipmakers gained 5.7% and 3.9%, respectively. Despite AMD's efforts to challenge Nvidia in the AI market, it remains far behind and has some skeptics on Wall Street. The stock has only risen by about 6% this year.

On Wednesday, AMD CEO Lisa Su informed CNBC's Jim Cramer that AI is a long-term endeavor, and we are currently in its early stages.

"Let's not rush the development of tech trends. They take time to unfold, not just a few months," Su advised. "We've only been in this ChatGPT world for about 18 months. We're all learning and enjoying it. We all use it."

AI will have a significant impact on various aspects of our lives, including education and drug development, as Su predicts.

"What we do is provide the computing, which is the beauty of all this," Su said.

On Thursday, Tesla experienced the greatest growth among tech's largest corporations, with a 7.4% increase. Despite being a laggard in the year's growth, with a 19.9% decline compared to the Nasdaq's 20% increase, Tesla has risen 72% from its low for the year in April.

Along with other leading tech companies, each experienced significant growth, increasing by nearly 4%.

WATCH: Cramer's interview with AMD CEO Lisa Su