Nvidia shares surge 15%, set off rally on Wall Street

New York: The benchmark S&P 500 index hit a fresh record high on Thursday after a blowout revenue forecast from AI darling Nvidia boosted investor confidence in the sector and sparked a rally in growth and technology stocks. Nvidia’s shares surged 15.2% after the chip designer forecast a roughly three-fold surge in first-quarter revenue on strong demand for its AI chips and beat expectations for fourth-quarter revenue.

This pushed the benchmark S&P 500 up 1.71%, to an all-time high of 5,066.81 points.

Nvidia’s earnings were a major test for the AI-fueled rally on Wall Street that first pushed the S&P 500 above the 5,000 point mark earlier this month. Some analysts had cautioned that disappointing results could spark a steep selloff among technology stocks.

“The whole package of Nvidia’s reporting lends a bedrock of credibility for other AI and technology companies as it clearly appears that Nvidia and AI are here to stay,” said Andre Bakhos, president at Ingenium Analytics.

The Dow Jones industrials also hit a record high of 38,994.50 points earlier in the day and was last up 280.22 points, or 0.73%, at 38,892.46. The Nasdaq Composite was up 380.60 points, or 2.44%, at 15,961.47.

Nvidia was set to add over $250 billion to its market capitalization if gains held, beating Meta Platform’s $196 billion surge earlier this month in the biggest one-day gain by any company in Wall Street history.Shares of other companies, seen as beneficiaries of the AI boost, also got a shot in the arm. Nvidia’s rival Advanced Micro Devices, server component supplier Super Micro Computer and Arm Holdings jumped between 7.6% and 26%.Big Tech and growth stocks such as Alphabet, Microsoft and Meta Platforms rose between 1.8% and 4%.

Meanwhile, investors’ bets are tilted towards June as the starting point for the first rate cut from the Federal Reserve.

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