Futures tied to the tech-heavy Nasdaq-100 index outpaced peers on Thursday after Nvidia's blockbuster forecast renewed investor confidence in the AI trade and boosted technology stocks.
Nvidia NVDA.O shares rose 7.2% in premarket trading, after the chip giant's robust forecast illustrated relentless demand for AI computing, even as it warned that shortages of memory components could curb the pace of the industry's growth.
The report met investors' high expectations and bolstered the view that the tech rally is far from over, with companies at the heart of AI buildout continuing to post strong growth.
"The biggest positive was management effectively telling investors that AI demand remains supply-constrained... That is a powerful counter to the narrative that the AI capex cycle is already peaking," said Charu Chanana, chief investment strategist at Saxo Markets.
She, however, warned against excessive optimism and said investors could be more selective going forward.
"Nvidia's results validate the AI infrastructure trade, but they are not a signal to indiscriminately chase everything labeled AI."
Global tech stocks saw renewed investor interest, with South Korea's KOSPI .KS11 closing 1.5% higher. U.S. chipmakers such as Micron Technology MU.O, Marvell Technology MRVL.O and Broadcom AVGO.O added 4.1%, 4.7% and 1.7%, respectively.
Data storage firms Sandisk SNDK.O and Western Digital WDC.O gained 4.5% and 3.9%, respectively.
Salesforce CRM.N jumped 11.6% after raising annual revenue and profit forecasts, and rolling out a new plug-in combining its capabilities with Anthropic's Claude AI models.
CrowdStrike CRWD.O climbed 9.5% after the cybersecurity software provider raised its annual revenue forecast and topped second-quarter earnings estimate.
Both these reports calmed worries that advanced AI tools could upend the traditional software industry, boosting investor appetite for beaten-down software stocks and narrowing the gap with semiconductors, which are seen as the primary beneficiaries of the AI boom.
Other software firms such as ServiceNow NOW.O and Oracle ORCL.O added more than 2% each.
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