Nvidia's impressive earnings and an optimistic sales forecast, especially for AI hardware, led to a surge in Nasdaq futures and renewed investor confidence in the tech sector. The company reported $96.2 billion in revenue for the recent quarter, a 106% increase year-over-year, with data center revenue reaching $89 billion, up 117%. Nvidia projects $108 billion in revenue for the current period, exceeding analyst expectations of $105.2 billion, and CFO Colette Kress anticipates fiscal 2028 income to grow by 70%, surpassing earlier analyst estimates of 45%.
Despite an initial dip after the earnings release, Nvidia shares ultimately rose more than 4% in after-hours trading. This bullish outlook from Nvidia, a key player in the AI market, propelled the Nasdaq 100 Index futures up by approximately 1%. Intel Corporation also saw positive momentum, with its stock rising 1.12% to $88.24. Companies like ASML Holding NV and Micron Technology are expected to benefit from this renewed AI investment cycle.
However, the broader market showed caution. Wall Street saw stocks waver, and bonds fell due to expectations of a Federal Reserve rate hike by December, with money markets fully pricing in such a move. While a key inflation gauge matched estimates, it remained above the Fed's target. The S&P 500 and MSCI World Index were little changed, and the Dow Jones Industrial Average fell 0.2%. Ellen Zentner of Morgan Stanley Wealth Management noted that the latest economic numbers were not what investors wanted to see, given their sensitivity to anything that might increase the odds of higher rates, though they weren't enough to shift the September Fed meeting's balance.
