Major indexes in the US rose on Wednesday with the tech-heavy Nasdaq Composite leading the gains ahead of a pivotal earnings report by chip-making Nvidia. Nasdaq rose by 1.3% leading Wall Street higher.
This comes as investors have been considering a slew of economic data and headlines in recent trading sessions, which has resulted in some thinking twice about the highly priced tech stocks and other riskier assets.
Nvidia leads market higher
According to a Reuters report, as at 11:31 a.m ET, the Dow Jones Average rose 112.51 points or 0.28% while the S&P gained 42.56 points or 0.71%. The Nasdaq put on 211.83 points or 1.11% to 19,238.21.
The report further indicates that eight of the S&P 500’s 11 sectors traded higher. The tech sector rose 1.8% with Nvidia putting on 4.4% while peers Broadcom and Advanced Micro Devices (AMD) gained and spurred broader semiconductor index 2.6% firmer.
This comes as the market anticipates Nvidia’s quarterly results and forecasts, which are likely to set the tone for AI stocks that have dominated Wall Street.
Super Micro Computer advanced close to 20% after the server maker filed overdue financial statements and the stock is on course to record its best month since May 2023.
According to Reuters, megacaps traded mixed as Meta Platforms rose 3%, but Apple went down 2%. Tesla gained 1.2% a day after the electric vehicle firm’s value went down to below $1 trillion.
Now, the gains reversed the declines that had been experienced earlier as the S&P 500 and the Nasdaq logged their biggest four-day declines since September on Tuesday, on the back of weakness in tech stocks. This was after an analyst report had hinted at overcapacity in AI infrastructure.
Main indexes on Wall Street were also on course for monthly declines, with the Nasdaq poised for its worst decrease in 10 months.
Nvidia has grown to become a market influencer
According to The Wall Street Journal, Nvidia’s earnings have turned into a major market event. The chip making giant has moved by 6% or more a day after reporting financials in three of the last four quarters.
Many investors expect its earnings report to make or break the recent stock market swoon. They anticipate to see immense growth in Nvidia’s revenue and earnings.
Wall Street anticipates Nvidia to earn an adjusted 85 cents a share, representing a 63% increase year over year, on sales of $38.1 billion, up 72% in the quarter ended January 16.
For the current quarter, its fiscal Q1, analysts are modeling the chip maker earnings of 91 cents a share, up 459% on sales of $42.07 billion, an increase of 61%.
Analysts are also looking forward to any commentary on politics and competition at a time when the company’s chips got caught up in a US and China standoff.
Nvidia has been rattled by the emergence of AI startup DeepSeek, which launched a chatbot in January at a fraction of the cost of peers and big competitors like OpenAI’s ChatGPT, Google’s Gemini, and Meta’s Llama.
The introduction of low cost models from DeepSeek shook the industry and raised concerns around Big Tech’s heavy investments into the technology.
Chief investment officer at Morgan Stanley Wealth Management, Lisa Shalett said the DeepSeek issue was an eye-opener that showed the world how the tech revolution works.
“(Nvidia’s) been the bellwether of this bull market… but (what’s) fundamentally shifted is this assumption that the only companies that will win and dominate generative AI themes are the ‘Magnificent Seven’,”
said Shalett.
“What the DeepSeek news reminds everybody is, that’s not how technology revolutions work,” Shalett added.
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