Global tech stocks rallied Thursday as investors piled back into AI-related names, buoyed by Nvidia earnings.
Nvidia topped forecasts for revenue, which jumped 62% to $57.01 billion year-on-year, and issued stronger-than-expected fourth-quarter sales guidance, giving investors the confidence they were looking for to continue placing bets on the AI industry. Shares were 5% higher in premarket trade.
In Europe, Dutch semiconductor firms BESI and ASMI moved up over 3% and 2% in the first hours of trading, respectively. ASML, which makes critical equipment for semiconductors, gained 2.1%.
Asia-listed stocks Samsung Electronics and Hon Hai Precision Industry, also known as Foxconn, climbed 3.5% and 3.3% higher, respectively.
Stateside, investors flocked to tech stocks in premarket trade: AMD rose 5%, Arm gained almost 4%, Micron Technology advanced 2.7%, Marvell Technology added 3.3%, Broadcom was last seen 3.1% up and Intel moved 2% higher.
Phenomenal growth
Dan Hanbury, global equity portfolio manager at Ninety One, which holds Nvidia as its second-largest holding in its global strategic equity fund, cautiously welcomed Nvidia’s share price jump in Thursday’s premarket trade.
“As a holder, it’s great to see an early positive reaction but of course as we know those reactions can reverse further into the day,” Hanbury told CNBC’s “Squawk Box Europe.”
“Our reading of the numbers is they are very strong. Clearly, we can get caught up in the quarterly noise of a company like this but if we just put those [numbers] in context … only three years ago they were delivering $15 billion of data center revenue, we’re now looking at consensus forecasts into next year of $280 billion,” Hanbury said. “That is phenomenal growth that these guys are delivering.”
Karen McCormick, chief investment officer at London-based venture capital company Beringea, spoke with CNBC’s “Squawk Box Europe” about some of the recent moves to bulk-up on AI and scale, particularly following Nvidia and Microsoft‘s recent push to invest up to $15 billion in OpenAI rival Anthropic.
“It’s always a little bit intimidating to contradict Jensen Huang right after he has made phenomenal earnings results but in terms of the almost incestuousness of the valley and the AI companies, it is more than we have seen in the past,” McCormick said.
“I mean, if you think about traditionally, we might have called something like this vendor financing, where your vendor is helping to support the business,” McCormick said. “In this case we are just doing it with hundreds of billions of dollars and the ecosystem itself is now so intertwined that it’s almost a little bit nerve-wracking because if we are in a bubble and if any of that bubble bursts, what is going to happen to all of the related businesses?”
“The flip side to that is that each of them has incredibly robust balance sheets and incredibly robust investors, who may not let them fail either way,” she added.
— CNBC’S Sam Meredith contributed to this report
