AI Darling Stock Nvidia Stocks soared in pre-market trading after Wednesday’s close after U.S. companies reported better-than-expected third-quarter results.
The stock was trading 5.5% higher as of 4:15 a.m. ET.
Nvidia announced better-than-expected fourth-quarter revenue guidance, with revenue up 62% year-over-year to $57.01 billion.
“There’s been a lot of talk about an AI bubble,” Nvidia CEO Jensen Huang told investors on an earnings call, clarifying his company’s view of the industry. “From our perspective, we see something completely different.”
Ben Ballinger, global head of technology research and investment strategist at Quilter Cheviot, told CNBC’s “Early Edition Europe” that Nvidia’s rescue came in two parts. First, the company beat gross profit margins, which is important for semiconductor stocks, but the company also addressed market concerns head-on in its earnings call.
“They thoroughly examined and tried to sort of disprove just about every bear case that’s out there. They talked about the laws of scaling, and they talked about all the different elements of demand, not just hyperscaler capex, but model demand, software demand, enterprise demand, sovereign AI, that we’re seeing from companies like OpenAI and Anthropic,” Ballinger said.
Nvidia also cited supply constraints, vendor financing, partnerships, and China. “So they really did the legwork of calling out all the elephants in the room, all the possible bear cases, investigating them and giving their perspective on it,” Ballinger added.
Nvidia’s positive guidance helped lift investor sentiment for AI trading, which had weakened in recent trading amid concerns about soaring valuations, debt financing and a potential chip decline. The results sent stocks across the AI ecosystem sharply higher in after-hours trading, including chipmaker Advanced Micro Devices and power infrastructure companies such as Broadcom and Eaton.
Asian semiconductor stocks also rose on Thursday, with Samsung Electronics and Hon Hai Precision Industries, also known as Foxconn, leading the gains.
—CNBC’s Pia Singh contributed to this report.
