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Strong results and guidance from Nvidia (NASDAQ:NVDA) that some on Wall Street called a “game changing moment” led both artificial intelligence and semiconductor stocks higher in early trading on Thursday.
AI at a 'tipping point'
“Accelerated computing and generative AI have hit the tipping point,” Nvidia Chief Executive Jen Huang said in a statement after the company issued its fourth-quarter results and guidance. “Demand is surging worldwide across companies, industries and nations.”
Comments like that, along with Nvidia's financial performance, helped stocks like Super Micro Computer (NASDAQ:SMCI), SoundHound AI (SOUN), BigBear.ai Holdings (BBAI), C3.ai (AI) and other AI-linked stocks move higher, led by a 35% gain for Super Micro.
Investment firm Rosenblatt Securities raised its price target on Super Micro earlier this week to $1,300, citing continued momentum in AI computing.
Separately this week, Super Micro announced a proposed convertible senior notes offering of up to $1.5B.
No double dip for chips
Semiconductor stocks also moved sharply higher on back of Nvidia's results, especially as the company said it expects the data infrastructure installed base — currently at around $1T — to double over the next five years.
AMD (AMD) shares rose 7.5% in early trading, while Broadcom (AVGO), Qualcomm (QCOM), Micron Technology (MU), Marvell Technology (MRVL), Arm Holdings (ARM) and Taiwan Semiconductor (TSM) also saw strong gains.
Taiwan Semiconductor manufactures processors for Nvidia, along with AMD, Apple (AAPL) and others.
Conversely, Intel (NASDAQ:INTC) which made several announcements regarding its foundry business on Wednesday, including a partnership with Microsoft (MSFT), fell 1.8%.
Nvidia's quarterly results and guidance are seen as a “game changing moment” that reiterates the AI Revolution is just starting, Wedbush Securities analyst Dan Ives said.
“For the elite, transformational tech stories such as Nvidia and the AI Revolution investors must see the forest through the trees to where this spending wave (and estimates) can head over the next 3 years and we believe 60%-70% of enterprises will ultimately head down the AI use case path as we estimate a $1 trillion of incremental AI spend over the next decade,” Ives wrote.
Synopsys (NASDAQ:SNPS) shares rose more than 10% on Thursday after the company benefited from its own quarterly results and guidance, along with improved sentiment surrounding AI.
More on Intel, Nvidia, etc.
- Nvidia Q4: It's Good To Be The King
- Short Nvidia, Long NVDY To Take Advantage Of Option Market Euphoria
- Nvidia Q4: Good Quarter, Still Watching Competitive Threats
- Biggest stock movers today: NVIDIA, Moderna, Lucid Group, and more
- 'A game changer:' Nvidia shocks Wall Street as generative AI hits 'tipping point' (update)