Nvidia’s record results boost Wall Street as tech stocks surge amid market optimism
Nvidia’s record-breaking quarterly earnings have lifted Wall Street, with tech stocks surging amid strong demand for AI chips. The Nasdaq and S&P 500 posted significant gains as investors reacted to the latest financial results.
Wall Street opened higher on Thursday, driven by the strong financial performance of semiconductor giant Nvidia. The company reported a 78% increase in fourth-quarter 2024 revenue, reaching $39.3 billion, surpassing analysts’ expectations. This growth is largely attributed to the rising demand for advanced AI chips, particularly Nvidia’s next-generation Blackwell processor.
Despite concerns over emerging competition, such as China-based DeepSeek, Nvidia has maintained its market dominance in GPUs. CEO Jensen Huang emphasized that the demand for advanced AI infrastructure continues to expand, fuelled by emerging technologies in reasoning and physical AI applications.
Nvidia's Q4 surge: Blackwell chips propel record growth of nearly 80% amid AI boom. Photo: The Indian Express.
Major stock indexes react positively
- Dow Jones industrial average: Up 0.12% in early trading, reflecting investor confidence in the tech sector.
- Nasdaq composite: Climbed 0.75%, directly benefiting from the strong performance of major tech companies like Nvidia.
- S&P 500: Rose 0.49%, with gains across various sectors, particularly in technology.
The market maintains high projections for Nvidia: revenue is forecast to grow 73% to $38.2 billion, while earnings per share are estimated at $0.84, an increase of 63%. Despite the recent rally, Nvidia shares have shown some lack of momentum over the past six months. In the five trading days prior to Tuesday, the paper retreated 9%, hurt by concerns about inflation and the impact of Donald Trump's trade and immigration policies, which hit the major indexes.
Market eyes tariff policies amid economic uncertainty
While Nvidia’s success drives optimism, investors remain cautious over potential economic shifts. President Donald Trump has hinted at new tariffs on imports from Canada, Mexico and China, which could affect trade dynamics. Meanwhile, Federal Reserve officials continue to weigh monetary policy adjustments, aiming to balance inflation control with economic growth.
Tech stocks, particularly those in the AI and semiconductor sectors, remain at the forefront of market movements. As Nvidia’s success fuels bullish sentiment, analysts are closely monitoring its long-term impact on the broader stock market. The optimism seems to be supported by growth expectations in the artificial intelligence sector and strong demand for its high-performance chips, factors that justify analysts' bullish view. However, the magnitude of the move before the results are known raises suspicions. This is not the first time that Nvidia has seen this type of rise before its balance sheets. In previous reports, the stock showed previous increases followed by volatile reactions after the release.