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The New York Stock Exchange welcomes executives and guests of VTEX (NYSE: VTEX), on July 21, 2021, in celebration of its Initial Public Offering.
NYSE
Stocks surged to new highs on Thursday after chip giant Nvidia reported much stronger-than-expected quarterly results, lifting the broader market and tech sector.
The S&P 500 traded 2.1% higher. The Nasdaq Composite advanced 3%, on pace for its biggest one-day gain since February 2023. The Dow Jones Industrial Average surged 449 points, or about 1.1%, to surpass 39,000 for the first time ever. Those increases put the major averages on track to snap a three-day losing streak.
Shares of Nvidia popped more than 15% to an all-time high after the chip company said total revenue rose a whopping 265% from a year ago — driven by its booming artificial intelligence business. Nvidia, which has become one of the largest U.S. companies by market capitalization, also forecast another stellar revenue gain for the current quarter, even against elevated expectations for massive growth.
Other tech names were also higher. Facebook parent Meta and Amazon gained more than 4% and 3%, respectively. Microsoft and Netflix advanced more than 2%.
“What we are seeing is a perfect positive storm of first mover advantage, combined with 80% market share and positive outlook for future growth in an area that could potentially transform not just the technology sector but how many industries function,” said Gerald B. Goldberg, chief executive officer and of GYL Financial Synergies.
AI enthusiasm has powered the jaw-dropping rally in Nvidia, along with other Big Tech names, over the past year. The chipmaker’s blowout quarter could further boost confidence in the space that has benefited the broader market.
Phillip Colmar of MRB Partners noted equities are benefitting from earnings growth and firmer economic activity than was expected. He said, however, that stocks could still drop if economic growth eventually becomes priced into higher bond yields.
“The mega cap U.S. stocks, or the ‘Magnificent 7,’ they are frothy. They have very elevated earnings expectations and very elevated valuations that doesn’t give any room for disappointment,” Colmar said. He noted that the Nvidia-fueled market rally still carries “inherent risk” to it, given the cyclical nature of semiconductor stocks.
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