Nvidia paves the way for AI stocks to keep surging with stellar earnings report

Nvidia Corp. has ignited optimism among traders with its stellar earnings report, propelling its shares up over 7% and quelling fears of a data-center spending slowdown. This surge also boosted Asian semiconductor suppliers like SK Hynix and TSMC. US hardware stocks, including Dell and AMD, followed suit. Nvidia's announcement of a 10-for-1 stock split further fueled the rally, highlighting the enduring strength of the AI market and its broadening impact across industries..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..By Jeran Wittenstein, Ryan Vlastelica and Carmen Reinicke.Nvidia Corp. just gave the green light to traders betting that the rally in artificial intelligence computing stocks — not to mention its own — has room to run. .___STEADY_PAYWALL___.Another estimate-thumping earnings report and forecast from the chipmaker sent its shares up more than 7% in postmarket trading, putting to rest lingering concerns that the spending spree on data-center gear over the past year might be due for a slowdown..Shares of Asian semiconductor companies that are suppliers to Nvidia outperformed broader markets on Thursday. South Korea's SK Hynix Inc., which supplies high-bandwidth memory to the US chipmaker, gained 3.2% while Taiwan Semiconductor Manufacturing Co., the maker of Nvidia's chips, advanced 1.5% to a record. Japan's Advantest Corp. rose 5.2%. The Bloomberg Asia Pacific Semiconductors Index reached the highest level in more than three years..In the US, Nvidia's results sent a broad swath of hardware stocks rallying in after-hours trading. Among the biggest gainers were server makers Super Micro Computer Inc. and Dell Technologies Inc., which climbed more than 4%. Chipmakers Broadcom Inc., Marvell Technology Inc. and Advanced Micro Devices Inc. also rose.."We're in a technology revolution and still in the early days of it," Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, said after Nvidia's results. "It is really hard to not be positive right now, especially on Nvidia.".Read more: 🔒 Nvidia's earnings: Crucial test for market momentum.Nvidia's postmarket gain sent the stock above $1,000 for the first time. If the advance holds on Thursday, the chipmaker is set to add more than $100 billion in market value and push the stock's rise for 2024 over 100%..Helping to fuel Nvidia's rally was its announcement of a 10-for-1 stock split that the company said was aimed at making shares more accessible to employees and investors. The split would be Nvidia's second in the past three years, with the stock climbing more than 500% since the last one was announced in May 2021..Of course, stock splits have no fundamental effect on share value. They're the stock market equivalent of exchanging a $10 bill for 10 $1 bills. Still, they tend to help drive buying from mom-and-pop investors, according to Alec Young, chief investment strategist at Mapsignals. ."The split is huge news," Young said in an interview. "You shouldn't underestimate the appeal of stocks that are retail favorites.".For his part, Nvidia Chief Executive Officer Jensen Huang said demand for generative AI computing is expanding beyond cloud computing providers to other industries like automotive and health care..The results provided further evidence to Michael Sansoterra, chief investment officer at Silvant Capital Management, that the AI rally will continue. ."It says not only is the data-center spend strong for AI, but it also says that the folks working around the periphery will probably continue to do well as well," he said. "That bodes well for the health of the AI market, which is still in its early stages.".Read also:.🔒 Nvidia earnings could spark $200bn swing in shares, options show🔒Nvidia's meteoric rise sparks investor caution amid AI boom🔒 Nvidia joins $1.05bn funding round for self-driving startup Wayve.© 2024 Bloomberg L.P.

Nvidia paves the way for AI stocks to keep surging with stellar earnings report

Related Stories

Aliko Dangote seeks to raise $1.6bn from 10m retail investors in Africa's biggest IPO

Stephen Roach on BizNews: Don’t mess with markets

Norway doubles down on oil, says "Drill, Baby, Drill" as SA Concourt sterilises Wild Coast bounty

The Economist: What makes a great investor