Nvidia ignites chip stock rally as forecast shows AI boom is intact

Other AI-linked chip stocks also rose in a nearly $150 billion rally, with Intel, Micron, Broadcom and U.S.-listed shares of South Korea's SK Hynix up between 1.3% and 3.5%, after technology stocks gained on the Asian and European bourses.

Even AI cloud computing companies such as CoreWeave and Nebius, which are backed by Nvidia and increasingly seen as important to its business, rose between 2% and 4.5%.

At least 16 brokerages raised their price targets on Nvidia's stock as the results showed strong demand for its next-generation Rubin AI processors, according to LSEG data.

Still, Nvidia trades at a lower multiple compared with rivals as analysts' expectations for its earnings have risen faster than the company's share price. It has a forward price-to-earnings ratio of 17.9, well below Advanced Micro Devices' 37.2 times and Intel's 46.2 times.