Nvidia Shares Ignite Markets Across Globe

"A record jump in Nvidia shares turbocharged excitement about artificial intelligence Thursday, jolting markets around the world and powering major indexes on three continents to record highs.

The chip maker's shares surged 16% to $785.38, their highest level since the company started trading in 1999, a day after it turned in another quarter of blockbuster results. Its $277 billion gain in market value -- more than what mobile-phone chip maker Qualcomm is currently worth -- marked the largest one-day market-cap gain on record for a U.S. company.

Stocks darted higher shortly after the opening bell, and gains accelerated later in the trading day, sending the S&P 500 up 2.1%, its 12th record of 2024. The tech-heavy Nasdaq Composite leapt around 3%, outperforming its peers and notching its biggest one-day jump in a year. The Dow Jones Industrial Average topped 39000 for the first time, boosted by shares of Microsoft and Salesforce.

Shares in chip makers in South Korea, Taiwan and China jumped along with those in the U.S. In Japan, Nvidia's results helped the Nikkei 225 stock average surpass its 1989 record. The Stoxx Europe 600 index hit its own high for the first time since 2022.

The global rally came after Nvidia said its quarterly sales tripled from a year ago, driven by soaring demand for the computing power that underlies AI. The results sparked a jump in shares of other artificial-intelligence and robotics companies, building on a frenzy that has pushed the stock market to repeated highs over the past year.

"It was just a total smash hit across the board," said Thorne Perkin, president of multifamily office Papamarkou Wellner Perkin. "Nvidia is showing us that AI is real."

The big gains have defied dour predictions about U.S. stocks and skepticism about whether the tech titans known as the Magnificent Seven can keep driving the market higher. Yet the group, which includes Alphabet, Amazon.com, Apple, Meta, Microsoft, Nvidia and Tesla, has kept rising to kick off 2024 and added around half a trillion dollars in market value on Thursday alone, the biggest one-day gain since 2022.

Nvidia's one-day jump in market value surpassed Meta Platforms' $204 billion gain earlier this month.

This run-up has led many investors to abandon their bearish bets against these tech giants, according to JPMorgan Chase.

Some investors said they were more cautious about the frenzy. Activity in corners of the stock and options market in recent sessions has shown extreme optimism about the technology, stoking fears about an AI-driven bubble.

Shares of Advanced Micro Devices jumped more than 10%, while Micron Technology added 5.4%. Shares of Super Micro Computer, the server and storage solution specialist, soared more than 30% in a rally resembling the big one-day pops recorded by meme stocks in 2021.

"I certainly wouldn't go to the casino and put all my money on the number at the roulette table," said Rich Weiss, chief investment officer of the multiasset strategies group at American Century Investments.

Weiss said he finds other markets around the world more attractive right now.

Major indexes around the globe have joined the U.S. stock market's ascent. Stock indexes in Germany, France, Turkey, Taiwan and Argentina have all closed at records this month, according to Dow Jones Market Data.

Of course, artificial intelligence isn't the only thing driving markets higher. Recent data have shown that the U.S. economy remains strong, calming fears about a recession on the horizon.

The yield on the 10-year Treasury note inched up to 4.326% Thursday after the Labor Department said jobless claims, a proxy for layoffs, sank last week. The data added fuel to the recent bond selloff, driven by a spate of strong economic data.

Investors are also increasingly jumping into the stock market to ride the rally.

More than half of traders surveyed by Charles Schwab in January reported a bullish outlook on the U.S. stock market. That is the highest level recorded since the quarterly study began in 2021 and up from about 32% who were bullish in the fourth quarter." [1]

People hope that artificial intelligence has finally arrived and will replace all of our jobs, making those with the wealth to do business even richer, so they buy all sorts of stocks.

1.  Nvidia Shares Ignite Markets Across Globe. Banerji, Gunjan.  Wall Street Journal, Eastern edition; New York, N.Y.. 23 Feb 2024: A.1.