(Bloomberg) — Equity investors can exhale.
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On a day when virtually all trading felt like a prelude to Nvidia Corp.’s earnings report, the AI chip-making darling delivered a robust sales forecast that reinvigorated the artificial-intelligence mania behind last year’s stock-market rally. Its shares surged, spurring gains in index futures and rallies in global peers and suppliers.
The company gave revenue guidance for the current period that beat Wall Street’s lofty expectations, signaling demand remains solid for the hardware behind what purports to herald a revolution in productivity — and profitability.
Nvidia, the fourth-biggest component of the Nasdaq 100, with a 5% weighting, rallied 8% in post-market New York trading. Nvidia competitors Advanced Micro Devices Inc. and Intel Corp. rose as well. Nasdaq 100 futures climbed more than 1%.
SK Hynix Inc., a key supplier of memory chips to Nvidia, jumped as much as 4.7% in early trading in Seoul on Thursday. Japanese chip-tester maker Advantest Corp. surged 6.3%.
Wall Street’s reaction to Nvidia’s earnings:
Kim Forrest, chief investment officer of Bokeh Capital Partners LLC:
Nvidia has been the driver of the market for the past 11 months, as goes Nvidia, so goes the market. And it looks like the results are good enough – not a huge positive or a negative surprise. It does confirm the narrative that AI is going to continue to be strong for the foreseeable future. This narrative supported the markets last year, why wouldn’t it do the same this year?
Thomas Martin, senior portfolio manager at Globalt Investments:
With a revenue beat like this and guidance being raised for the current quarter, Nvidia is still growing and remains the AI leader. Do you really want to sell that? Everyone — including myself — was holding their breath wondering what could happen with this report. But Nvidia has clearly been experiencing such strong demand for its products and growth. To the extent that Nvidia can continue to deliver, that holds the line for the company and its stock price needs to be reflective of this new information.
Adam Sarhan, founder of 50 Park Investments:
It’s another blowout quarter. This is very bullish for stock investors and Nvidia has shown us that AI is here to stay. More importantly, the company has also show us that the AI excitement can be translated into actual earnings. That’s very powerful and they continue to beat Wall Street forecasts.
Thomas Monteiro, senior analyst at Investing.com:
The market was poised to sell the news following Nvidia’s earnings, given the sky-high expectations and deteriorating macro conditions. However, once again, the company left no doubt that the AI boom is much more than just a stock market narrative, but rather, the most significant bet from corporations worldwide at this moment.
(Updates with Nasdaq 100 futures and Asian share reactions; adds more analyst comments)
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