© Reuters. FILE PHOTO: A Nvidia logo is seen on one of their products on display at their headquarters in Taipei, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo
By Noel Randewich
(Reuters) -Nvidia’s strong quarterly revenue forecast delivered on Wall Street’s high expectations on Wednesday, sparking gains in a range of AI-related stocks and giving a jolt to a stalled U.S. stock market recovery.
Nvidia (NASDAQ:)’s stock jumped nearly 10% after the bell to a record high of $516, lifting its stock market value by about $110 billion to $1.27 trillion and extending its lead as the world’s most valuable chipmaker.
That came after the Santa Clara, California company issued a fiscal third-quarter revenue outlook above analysts’ expectations, boosted by soaring demand for its high-end chips that power much of the world’s major artificial intelligence technology.
E-Mini futures rose 0.5% and Nasdaq E-Mini futures climbed 0.9%, suggesting Wall Street is likely to open with gains on Thursday.
Investors this week had anticipated Nvidia’s results report as a potential spark to reignite gains in a sluggish U.S. stock market.
Nvidia shares have more than tripled this year, with the chipmaker at the center of a tech-stock rally fueled by optimism about the potential of AI.
“Without Nvidia, the sustained tech market rally we’re seeing might not exist,” said Insider Intelligence senior analyst Jacob Bourne. “The pressing question is whether Nvidia can consistently exceed the now-higher expectations.”
Nvidia’s forecast added to investor optimism. Big Tech and AI-related stocks saw their stock market values increase by over $70 billion, on top of Nvidia’s increased value, as their shares climbed following the report.
In extended trade, Microsoft (NASDAQ:) and Meta Platforms (NASDAQ:) added over 2%, while Google-owner Alphabet (NASDAQ:) added nearly 1%. Microsoft and Alphabet are rushing to incorporate generative AI into their Web search platforms and other services.
AI software maker C3.ai jumped 5.6% and Palantir Technologies (NYSE:), which recently launched its own AI platform, rose almost 5%.
AI-related component makers also rallied, with Advanced Micro Devices (NASDAQ:) and Broadcom (NASDAQ:) both up over 3%, Marvell (NASDAQ:) Technology climbing 5% and Super Micro Computer (NASDAQ:) rallying over 8%.
Nvidia forecast third-quarter revenue of about $16 billion, plus or minus 2%. Analysts polled by Refinitiv on average were expecting $12.61 billion.
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