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  • Writer's pictureThe San Juan Daily Star

AI darling Nvidia’s bumper results send S&P 500, Dow to record highs

Both the S&P 500 and Dow Jones Industrial average hit record highs on Thursday after artificial intelligence darling Nvidia forecast bumper revenue, stoking investor confidence that also boosted other growth stocks.


Nvidia’s (NVDA.O), opens new tab 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.


The benchmark S&P 500 (.SPX), opens new tab rose 2.04% at 2:02 p.m. ET, to an all-time high of 5,083.28 points.


Nvidia’s earnings were a major test for the AI-fueled rally on Wall Street that first pushed the S&P 500 (.SPX), opens new tab 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 (.DJI), opens new tab also breached 39,000 points for the first time in early-afternoon trading, as the positive momentum spread widely. It was up last up 425.67 points, or 1.1%, at 39,037.91. The Nasdaq Composite (.IXIC), opens new tab was up 452.29 points, or 2.9%, at 16,033.16, above the 16,000 mark for the first time since Feb. 12.


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.


The benchmark index will finish this year above the 5,000 mark, according to strategists in a Reuters poll.


Ten of the 11 major S&P 500 sectors rose, with technology stocks (.SPLRCT), opens new tab leading gains with a 4.2% jump. Utilities (.SPLRCU), opens new tab was the outlier, slipping 0.5%.


The S&P 500 growth index (.IGX), opens new tab rose 3.16%, headed for its biggest daily percentage gain since November 2022.


Shares of other companies, seen as beneficiaries of the AI boost, also got a shot in the arm. Nvidia’s rival Advanced Micro Devices (AMD.O), opens new tab, server component supplier Super Micro Computer (SMCI.O), opens new tab and Arm Holdings jumped between 9.2% and 33.2%.


Synopsys (SNPS.O), opens new tab hit a record high earlier in the day after the software maker for chip designers after reporting estimate-beating earnings and outlook. Despite giving up some gains, it was still 7% higher in mid-afternoon trade.


The Philadelphia Semiconductor index (.SOX), opens new tab also hit a record high, jumping 5.2%.


Big Tech and growth stocks such as Alphabet (GOOGL.O), opens new tab, Microsoft (MSFT.O), opens new tab and Meta Platforms (META.O), opens new tab rose between 0.8% and 4.4%.


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


Fed Vice Chair Philip Jefferson said on Thursday he would be looking at the totality of incoming economic data in assessing the time for the U.S. central bank to begin cutting its benchmark policy rate.


Data showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting a tight labor market.


Elsewhere, vaccine maker Moderna (MRNA.O), opens new tab jumped 15.7% after surprising investors with a fourth-quarter profit. The stock’s technicals also pointed to a bullish outlook.


However, Rivian (RIVN.O), opens new tab fell 26.3% and Lucid (LCID.O), opens new tab tumbled 16.1%, after the electric vehicle startups forecast 2024 production well below analyst estimates on slowdown in demand.

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