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Global technology stocks advanced on Thursday after Nvidia reported better than expected chip sales, reassuring investors on the artificial intelligence boom amid growing concerns of a bubble.
Asian markets opened higher, with Japan’s Nikkei 225 index up 2.4 per cent, driven by technology groups tied to AI such as investor SoftBank and semiconductor equipment maker Advantest. South Korea’s Kospi rose 3.2 per cent, led by Nvidia suppliers Samsung and SK Hynix.
US stock futures pointed to a rally when Wall Street opens. Contracts tracking the tech-heavy Nasdaq 100 were up 1.8 per cent, while those for the S&P 500 gained 1.2 per cent.
Nvidia’s results were seen as a test of investor sentiment in the AI sector because its chips power models such as OpenAI’s ChatGPT.
Tech stocks have declined in recent weeks as investors grow wary of valuations and massive capital expenditure on chips and data centres.
The chipmaker’s earnings on Wednesday appeared to assuage some of those concerns. Revenues grew 62 per cent year on year to $57bn in the three months to the end of October, beating consensus estimates of $55bn compiled by Visible Alpha.
The company’s shares rose more than 5 per cent in after-hours trading in New York.
“There has been a lot of talk about an AI bubble. From our vantage point we see something very different,” Huang told analysts on Wednesday, shrugging off any concerns that the AI spending spree was tailing off.
“Nvidia earnings yesterday [have] helped settle nerves in risk assets,” said Mitul Kotecha, head of emerging markets macro strategy at Barclays.
Bitcoin also rebounded, rising 1.2 per cent to $92,600. The digital asset had fallen more than 28 per cent in the past six weeks amid concerns over tech valuations and declining confidence in further interest rate cuts by the US Federal Reserve.
Minutes from the latest Fed meeting indicate deep divisions between inflation hawks and doves on the need for another interest rate cut this year, with Fed chair Jay Powell warning that the next decision was not a “foregone conclusion”.
“We’ve had a lack of US data and that has meant markets have been scratching around for an underlying picture of the US economy,” said Kotecha. “I’m not sure [Nvidia results] turns things around or that the underlying concerns have disappeared.”
