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Artificial intelligence and semiconductor chip stocks experienced a significant rally on Thursday following the announcement of U.S. chip design firm Nvidia’s impressive fourth-quarter earnings and revenue beat. Nvidia’s optimistic projection of “continued growth” in 2025 and beyond fueled investor confidence, driving up shares across the sector.
Leading the surge was Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip maker and a key supplier to Nvidia and iPhone maker Apple. TSMC saw its stock close up nearly 3% on Thursday, reflecting investor optimism about the company’s role in the semiconductor supply chain.
Super Micro Computer, a supplier of server components, also witnessed a remarkable uptick, with its shares closing up more than 32%. Similarly, Dutch chip equipment manufacturer ASML, crucial for chip making, experienced a gain of over 4% following Nvidia’s earnings report.
Rivals in the semiconductor space also benefited from Nvidia’s strong performance. Advanced Micro Devices (AMD) and SoftBank-backed U.K. chip designer Arm Holdings saw their shares surge by more than 10% and over 4%, respectively, on Thursday.
Nvidia’s custom-designed AI chips, utilized by tech giants like Amazon, Microsoft, and Google, have been in high demand amid the AI boom. Notably, the popularity of OpenAI’s ChatGPT, powered by thousands of Nvidia GPUs, contributed to Nvidia’s robust performance. Nvidia shares closed up more than 16% on Thursday.
The positive momentum extended to other U.S. chip makers, with Intel, Broadcom, and Qualcomm witnessing increases in their share prices. Broadcom and Qualcomm closed up more than 6% and 1%, respectively, while Intel initially gained but later closed down more than 1%.
Nvidia CEO Jensen Huang highlighted the favorable conditions for continued growth, citing the persistent demand for Nvidia GPUs driven by generative AI and the industry’s shift towards accelerators. Analysts expressed optimism about Nvidia’s future prospects, anticipating positive surprises in market share and margins.
Gene Munster, managing partner of Deepwater Asset Management, emphasized Nvidia’s potential to exceed expectations, reflecting broader market sentiment towards the company’s growth trajectory.
Overall, Nvidia’s stellar performance and optimistic outlook have injected renewed optimism into the AI and semiconductor sectors, signaling promising opportunities for investors moving forward.