Computing infrastructure company, Nvidia Corp, saw a gap up opening and the company’s shares touched fresh record high on the days of its earnings. Results came in better than analysts’ expectations, which supported the momentum and mood at Nasdaq 100 and S&P 500 indices.
Stock opened at $750, and it went up till $781.54. Since US indexes saw significant rally, it proves that investors remain optimistic about the prospects of generative AI.
Net income for 4Q ended January 28, 2024 went up by whopping ~769% percent year-on-year and 33% as compared to previous quarter to $12.3 billion, as a result of increasing demand for artificial intelligence worldwide.
These numbers are mind-boggling. Aren’t they? Well, this was quite expected investors see strong growth prospects for AI and cloud computing.
Revenue for the period went up to $22.1 billion, exhibiting a rise of 22% from previous quarter and up by 265% year-over-year. Accelerated computing and generative AI touched tipping point, with demand reaching at record levels worldwide throughout companies, industries and nations.
Nvidia’s rally lifted the market mood, with S&P 500 gaining ~2.11%, marking the best day since January 2023 to end at ~5,087.03 levels. UBS gave the highest target on S&P 500 for the year, at around 5,400 levels.
Nvidia’s results supported the momentum in Nasdaq too, with index increasing more than ~3% overnight. This was the best single day gain since the month of February 2023. Nasdaq is now just 15 points away from the record high. Dow Jones surpassed ~39,000 mark for the very first time, increasing ~1.2% overnight. All these 3 indexes saw strong gap up opening on 22nd February.
Nvidia’s shares increased by ~16% overnight, and the rise added ~$277 billion to market value in just a single day, exceeding Meta’s record of $197 billion which was seen just 20 days before.
Nvidia’s performance supported other tech stocks too, with Meta and Amazon’s shares going up close to ~4% each. Microsoft and Netflix increased by ~2%.
Experts believe that equities continue to benefit from earnings growth and healthy economic activity than was anticipated. On the cautionary side, these stocks might drop if economic growth gets priced in increased bond yields.
Yield on 10-year Treasury declined to ~4.31% from ~4.32% late on Wednesday.
Since US indexes saw significant rally, the momentum was seen in other markets as well. European shares increased on Thursday as investors eye European Central Bank’s minutes of the recent meeting related to interest rates. FTSE 100 went up by ~0.3% to reach ~7,685.53 levels. France’s CAC 40 increased by ~1.2% to 7,902.94 and Germany’s DAX spiked by ~1.5% at ~17,382.59. Euro Stoxx 50 added ~1.6% to reach ~4,851.68 levels.
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