Nvidia Shares Skyrocket After Blockbuster Earnings, Lifting Entire Chip Sector

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 Chip stocks climbed in out-of-hours trading on Wednesday and Thursday after chipmaker Nvidia smashed Wall Street’s expectations with its latest earnings report, continuing a period of extraordinary growth as booming interest in artificial intelligence propels the tech sector to new heights.

 

Shares for chipmaking giants Nvidia climbed nearly 8% during after-hours trading on Wednesday, peaking above $1,000 per share for the first time.

While these gains have pared a little in the hours since Nvidia’s earnings report, shares for the California-based company were still up by more than 6% at the time of writing on Thursday morning.

Nvidia shares are currently trading at around $1,013, putting the chipmaker on track to surpass the $1,000 milestone and hit an all-time high when markets open on Thursday.

Nvidia is not the only chipmaker benefiting from intense interest in artificial intelligence and shares for other companies producing crucial infrastructure to build, train and run AI models also soared on Thursday.

This includes shares for Taiwan Semiconductor Manufacturing Company, Arm Holdings, Dell Technologies and Super Micro Computer Inc., which were all up between 3% and 6% during pre-market trading.

Shares for Advanced Micro Devices (AMD) and ASML Holdings also climbed, with both rising nearly 2% on Thursday.


Nvidia released its hotly anticipated earnings report for the first quarter of 2024 on Wednesday afternoon. Nvidia smashed Wall Street’s expectations and the first three months of the year marked the company’s most profitable quarter ever. Respectively, profits and sales were up 628% and 268% compared to the same time period last year, Nvidia said, reporting $6.12 earnings per share and $26 billion in sales for the three-month period ending April 30.
Key Background

The release of OpenAI’s generative AI chatbot ChatGPT in 2022 ignited a global race among tech companies to build and deploy ever more advanced AI systems. The race has spurred stellar demand for the kinds of advanced computer chips required to maintain, run and develop these AI systems and Nvidia, formerly known for its gaming hardware, is one of the world’s leading beneficiaries for this demand and it has become a bellwether for interest in the sector. The AI boom has rapidly catapulted Nvidia from a successful but limited hardware producer worth around $360 billion at the end of 2022 to a global titan rivaling the likes of Microsoft and Apple and today the company has a market capitalization of more than $2 trillion.


What To Watch For

Nvidia announced a 10-for-1 stock split to make buying whole shares more accessible to investors and employees. This split is due to happen on June 7.

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