Global technology stocks experienced a significant surge on Thursday following the release of Nvidia’s quarterly results, which indicated a continued strong demand for artificial intelligence hardware. The company’s shares rose by 5% to $196.53 in premarket trading, according to Reuters. If these gains hold, Nvidia is poised to add approximately $243 billion to its market capitalization, surpassing the valuations of major companies like PepsiCo and Goldman Sachs.
The positive results have alleviated some concerns about a potential bubble in the AI sector, although questions still linger regarding the sustainability of the substantial spending boom. The robust demand for AI hardware has led to a bullish sentiment in the tech industry, with shares of US chipmakers Advanced Micro Devices and Intel increasing by about 5% and 2%, respectively. Other companies, including Arm Holdings, Micron Technology, and Broadcom, also saw gains ranging from 1% to 3%.
The European tech index rose by 1.2%, with ASML experiencing a 2.1% increase. In Asia, Taiwan’s TSMC saw a significant jump of 4.3%, while SK Hynix gained over 1.6%. Japan’s Nikkei also reclaimed the 50,000 mark, driven by the surge in chip suppliers and AI-related stocks.
Nvidia’s forward price-to-earnings ratio stands at 28.44, lower than that of its competitors, including AMD’s 35.70 and Intel’s 62.38. The company’s results marked its first acceleration in seven quarters, driven by a significant increase in data-center sales. Revenue guidance exceeded estimates, and margins are expected to remain in the mid-70% range through fiscal year 2027.
The strong performance of Nvidia and other tech companies has significant implications for the industry, particularly in the context of the growing demand for artificial intelligence and machine learning technologies. As the tech sector continues to evolve, investors and industry watchers will be closely monitoring the sustainability of this growth trend and its potential impact on the global economy. With the increasing importance of AI and related technologies, companies like Nvidia are likely to remain at the forefront of this development, shaping the future of the tech industry.