NVIDIA shares up 10% on AI hopes
NVIDIA climbed 9.5% last night after an excellent set of earnings and a rise in forecasts. The chips that it makes are those that help apply artificial intelligence which is an increasingly interesting area for tech companies.
(Video Transcript)
NVIDIA shares soar
NVIDIA shares jumped almost 10% in extended trade on the IG platform late last night.
The chip maker reported better than expected earnings and also guidance. The group posting an adjusted profit of $0.88 per share for its fourth quarter (Q4), beating analyst estimates of $0.81 revenue reaching just over $66 billion, compared with analyst estimates of $6 billion itself and NVIDIA forecast first quarter revenues of $6.5 billion plus or -2% higher than the $6.3 billion anticipated by analysts.
Share price chart
And if we look at the share price chart, you can see clearly the reaction that we've had yesterday with this move up.
You can see quite clearly at the post-market trade, which helped steer gains in the 24-hour markets for the Nasdaq yesterday, not too far away from recent highs. The stock will open at 9:00 this morning, all-sessions on the platform at $225.99.
Artificial Intelligence (AI) has been the catalyst of this set of earnings and NVIDIA's chief executive said the use of chips now to power services like chat bots had gone through the roof in the last 60 days.
And this is where NVIDIA really plays in to the opportunities in this market. Analysts believe that NVIDIA, more than any other company, is best positioned to benefit from such increased costs as it dominates. Roughly 80% of the market for graphics processing units or GPUs used to speed up artificial intelligence work.
So where do we go from here? Well, clearly, this 113% rise all the way up to the recent highs on this market at $230.46 is the area to break. NVIDIA did very well during the lockdowns. Since then, there have been concerns about the outlook. But I think artificial intelligence, where it is centered, is going to be the future for this stock and also for the tech sector generally.
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