By Rashika Singh and Rae Wee
(Reuters) -Global technology shares rallied on Thursday after Nvidia’s blow-out quarterly results signalled that demand for artificial intelligence hardware remains strong even as analysts caution the boom may be outpacing fundamentals.
The chip bellwether’s stellar results tempered some concerns over a potential AI bubble, although questions lingered around the sustainability of the massive spending boom not paying off as anticipated.
Nvidia is on track to add about $243 billion to its market cap, which is more than entire valuation of companies such as PepsiCo, and Goldman Sachs, if gains hold, with shares up 5% at $196.53 in premarket trading.
Bullish spirit lifted many tech stocks around the world, with shares of U.S. chipmakers Advanced Micro Devices and Intel rising about 5% and 2% respectively, while Arm Holdings, Micron Technology and Broadcom gained between 1% and 3%.
The European tech index climbed 1.2%, with ASML gaining 2.1%.
Across Asia, Taiwan’s TSMC jumped 4.3%, SK Hynix gained over 1.6% and Japan’s Nikkei reclaimed the 50,000 mark as chip suppliers and AI-linked stocks surged.
Chief Executive Jensen Huang dismissed bubble concerns, calling demand “incredible” and noting bookings extend into 2026. “We see something very different from a fleeting hype cycle,” he said, pointing to Nvidia’s deep integration across cloud, enterprise, and edge computing.
“Amid a swell of concern heading into this print, Nvidia delivered not just solid results and guidance, but a beat-and-raise that was even stronger than most had expected,” J.P.Morgan analysts said.
“In our view, a testament to strong execution across Nvidia’s vast and complex supply chain.”
The AI market bellwether is up about 39% so far this year. Post-earnings optimism has reversed its November losses, pushing Nvidia shares nearly 2% higher for the month after a surge of more than 1190% over the past three years.
Nvidia also became the first-ever chipmaker to cross the $5 trillion market cap mark, cementing its status as the face of the AI revolution.
“AI exposure is essential for long-term wealth building,” said Mark Haefele, CIO at UBS Global Wealth Management. “Investors should diversify across the AI value chain—from enabling technologies to intelligence and application layers.”
Nvidia’s forward price-to-earnings ratio stands at 28.44, below AMD’s 35.70 and far lower than Intel’s 62.38.
The results marked Nvidia’s first acceleration in seven quarters, powered by surging data-center sales. Revenue guidance topped estimates and margins are expected to hold in the mid-70% range through fiscal year 2027.
Analysts hailed the beat-and-raise as proof the AI boom is intact, though some warned of risks tied to Nvidia customer’s capex and financing.
“Nvidia’s across-the-board beat shows the AI boom is far from over,” said Bob O’Donnell, chief analyst at Technalysis Research. “Demand still outstrips supply, with hyperscalers and server makers buying aggressively.”
(Reporting by Rae Wee in Singapore and Rashika Singh in Bengaluru; Editing by Jacqueline Wong and Ronojoy Mazumdar)
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