🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Shares

Wall Street sprints towards higher open on Nvidia's mega rally

Published 22/02/2024, 09:11 pm
© Reuters. Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 14, 2024.  REUTERS/Brendan McDermid/File Photo
NDX
-
MSFT
-
GOOGL
-
NVDA
-
AMD
-
NQZ24
-
TSLA
-
SMCI
-
META
-

By Amruta Khandekar and Bansari Mayur Kamdar

(Reuters) -Wall Street's main indexes were set to open higher on Thursday after Nvidia's bumper results and forecast added to the artificial intelligence-led rally this year that has propelled Wall Street to record highs.

Nvidia's shares surged 12.5% in premarket trade after the chip designer forecast a roughly three-fold surge in first-quarter revenue on strong demand for its AI chips.

The company, which also beat expectations for fourth-quarter revenue, could add more than $200 billion in market capitalization, if gains hold.

Shares of other companies, seen as beneficiaries of the AI boost, also got a shot in the arm. Nvidia's rival Advanced Micro Devices (NASDAQ:AMD), server component supplier Super Micro Computer and Arm Holdings (NASDAQ:ARM) jumped between 5.3% and 12.9%.

Exchange traded funds (ETFs) tracking semiconductors such as VanEck Semiconductor ETF and iShares Semiconductor ETF gained 5.3% and 3.9%, respectively, while Global X Robotics and Artificial Intelligence ETF climbed 4.0%.

Big Tech and growth stocks such as Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Tesla (NASDAQ:TSLA) and Meta Platforms rose between 0.5% and 2.4%.

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

Wall Street could notch fresh record highs in the near term if the momentum gathers pace.

"Investors are embracing Nvidia especially, but continue to embrace AI. In the short run, momentum is definitely behind a lot of the AI stocks," said Paul Nolte, senior wealth advisor and market strategist for Murphy & Sylvest, but warned of risks in the long term.

"The assumptions are that earnings are going to grow at this pace for the next four-five years and that for a company that size in market value, is going to be a difficult hurdle," Nolte added, referring to Nvidia.

Meanwhile, investors stuck to bets the U.S. Federal Reserve will begin cutting interest rates in June after minutes from the central bank's latest meeting showed a majority of policymakers were concerned about the risks of easing policy too soon.

Data showed initial jobless claims fell to 201,000 in the week ended Feb. 17 from 213,000 in the previous week, signaling the labor market remained tight. Economists polled by Reuters had estimated 218,000 jobless claims.

Surveys on business activity in February from S&P Global (NYSE:SPGI) will also be in focus after markets open.

At 08:36 a.m. ET, Dow e-minis were up 193 points, or 0.5%, S&P 500 e-minis were up 66.75 points, or 1.34%, and Nasdaq 100 e-minis were up 359.5 points, or 2.05%.

Of the 395 companies in the benchmark S&P 500 index that have reported earnings for October-December quarter as of Friday, 80% beat analyst expectations, according to LSEG data.

Rivian and Lucid fell 18.2% and 7.6%, respectively, after the electric vehicle startups forecast 2024 production well below analyst estimates on slowdown in demand.

© Reuters. FILE PHOTO: A screen tracks NVIDIA Corp. as a trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 23, 2023.  REUTERS/Brendan McDermid/File Photo

Royal Caribbean rose 5.4% after lifting its annual profit forecast as the company benefits from strong cruise demand.

Peers Norwegian Cruise Line Holdings and Carnival (NYSE:CCL) Corp added 3.7% and 5.4%, respectively.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.