Tech Stocks Jump After Nvidia Earnings Relieve AI Bubble Fears
Global tech stocks rallied after Nvidia topped earnings expectations and lifted its sales outlook, easing worries about an AI-driven market bubble.
Quick Take
- Nvidia revenue up 62% YoY to $57.01B; upbeat guidance.
- Shares up ~5% premarket; global chipmakers advance.
- European and Asian semiconductor leaders post gains.
- U.S. premarket: AMD, Arm, Micron, Marvell, Broadcom, Intel higher.
Market Overview
Global technology stocks saw significant gains Thursday, driven by upbeat investor sentiment following Nvidia’s impressive earnings report. The semiconductor giant reported a 62% year-over-year revenue increase to $57.01 billion, exceeding expectations and offering optimistic sales guidance for the coming quarter. Nvidia’s shares rose 5% in premarket trading.
Regional Moves
Europe
European semiconductor companies responded positively, with Dutch firms BESI and ASMI gaining more than 3% and 2%, respectively, while ASML, another key industry player, added 2.1%.
Asia
In Asia, Samsung Electronics and Hon Hai Precision Industry (known as Foxconn) climbed 3.5% and 3.3%.
United States
U.S. tech stocks experienced similar enthusiasm in premarket hours. AMD advanced 5%, Arm nearly 4%, Micron Technology 2.7%, Marvell Technology 3.3%, Broadcom 3.1%, and Intel 2%.
What Analysts Are Saying
Dan Hanbury, global equity portfolio manager at Ninety One, remarked on the impressive scale of Nvidia’s data center revenue growth, highlighting the jump from $15 billion three years ago to anticipated consensus forecasts of $280 billion next year. Hanbury pointed out, however, that market reactions can be volatile, urging caution.
Karen McCormick, chief investment officer at Beringea, discussed the increasing interconnectedness among AI companies, referencing Nvidia and Microsoft’s recent investments in Anthropic, an OpenAI competitor. McCormick expressed some concern about the deep ecosystem ties, noting that if an AI market bubble were to burst, it could have widespread effects. Nevertheless, she emphasized that the companies involved benefit from strong financial positions and backing from major investors.
Outlook
Thursday’s rally suggests renewed investor confidence in the AI sector, as robust earnings from leading players like Nvidia appear to ease concerns about a potential market bubble.
