Nvidia Clears the Way for AI Stocks to Keep Powering Higher

Nvidia Corp. just gave the green light to traders betting that the rally in artificial intelligence computing stocks — not to mention its own — has room to run.

Another estimate-thumping earnings report and forecast from the chipmaker sent its shares up 7% in premarket trading, putting to rest lingering concerns that the spending spree on data-center gear over the past year might be due for a slowdown.

In the US, Nvidia’s results sent a broad swath of hardware stocks rallying in premarket trade. Among the biggest gainers were server makers Super Micro Computer Inc. and Dell Technologies Inc., which climbed more than 4%. Chipmakers Broadcom Inc., Marvell Technology Inc. and Advanced Micro Devices Inc. also rose.

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“We’re in a technology revolution and still in the early days of it,” Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, said after Nvidia’s results. “It is really hard to not be positive right now, especially on Nvidia.”

Shares of semiconductor companies that are suppliers to Nvidia got a boost during the Asian trading day. Taiwan Semiconductor Manufacturing Co., the maker of Nvidia’s chips, advanced to a record high while South Korea’s SK Hynix Inc., which supplies high-bandwidth memory to the US chipmaker, also rose. Japan’s Advantest Corp. jumped 5.4%. The Bloomberg Asia Pacific Semiconductors Index reached the highest level in more than three years.