Nvidia Corp. soared to a record high after the world’s most valuable chipmaker forecast quarterly revenue 50% higher than estimates and said it was ramping up supply to meet demand for its artificial-intelligence (AI) chips.
Investors had exchanged over $53 billion worth of Nvidia’s shares as of late-afternoon, according to Refintiv data.
“Nvidia has officially replaced FANG as the centerpiece of this market,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “Investors are obsessed with AI, and Nvidia is the perfect AI story.”
Heavyweight AI players Microsoft Corp. and Alphabet Inc. rose over 2% each for most of the session. Advanced Micro Devices Inc, Micron Technology Inc and Broadcom Inc also rallied.
The Philadelphia SE Semiconductor index soared as much as 7% to its highest level in more than a year and was on track for its biggest daily percentage rise since November.
Intel Corp., which investors view as lagging in the AI race, lost ground, weighing on the Dow Jones Industrial Average.
Wall Street has been jittery in recent days about dragging negotiations in Washington to raise the nation’s $31.4 trillion debt ceiling and avoid a default.
U.S. President Joe Biden and Republican lawmaker Kevin McCarthy on Thursday were edging close to a deal, with the parties just $70 billion apart on discretionary spending, Reuters reported, citing a source familiar with the talks.
Reflecting market uncertainty, two-year yields hit their highest since March after ratings agencies Fitch and DBRS Morningstar put the United States on a credit watch for a possible downgrade.
Meanwhile, data showed the number of Americans filing new claims for unemployment benefits rose only moderately last week, while a Commerce Department report confirmed economic growth slowed in the first quarter.
According to preliminary data, the S&P 500 gained 36.07 points, or 0.88%, to end at 4,151.27 points, while the Nasdaq Composite gained 213.16 points, or 1.71%, to 12,698.09. The Dow Jones Industrial Average fell 31.33 points, or 0.10%, to 32,768.59.
The S&P 500 is now up about 8% so far in 2023 and the Nasdaq has recovered over 30% from its losses last year.
Ralph Lauren Corp. rallied after the luxury retailer beat profit estimates.
Electronics retailer Best Buy Co. Inc. rose following upbeat quarterly earnings, while discount store chain Dollar Tree Inc tumbled after cutting its annual profit outlook.
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