Nvidia's strong revenue forecast exceeded expectations, propelling the chipmaker towards a market cap of nearly $1 trillion. This news also sparked a global rally in AI-related stocks. Nvidia's stock surged by as much as 26% after announcing expected sales of around $11 billion, surpassing analysts' estimates of $7.2 billion. This report is being hailed as a potential record-breaking beat, driven by the growth of generative AI and accelerated computing.
Nvidia's positive performance boosted expectations for the technology sector, causing Advanced Micro Devices Inc. and various chip suppliers to rise. This resulted in a collective increase of $215 billion in market value for companies like SK Hynix Inc., ASML Holding NV, ASM International NV, BE Semiconductor Industries NV, VAT Group AG, and Soitec. These gains occurred despite concerns about the US debt limit and China's economic slowdown.
Why it matters
AI-related software stocks, including C3.ai, BigBear.ai, Guardforce AI, and SoundHound AI, saw significant gains. Super Micro Computer and Palantir Technologies also experienced notable jumps. Investors are optimistic about the future of AI technology, particularly due to the success of OpenAI's ChatGPT. Nvidia's high-performing chips are well-suited for training AI software through data-intensive processes.