For the first time since last October, Nvidia surged to a new high!
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Nvidia’s market capitalization has firmly surpassed the $5 trillion threshold, maintaining its position as the world’s most valuable company.
On Friday, April 24, Nvidia’s stock closed up 4.32% at $208.27, breaking the previous record closing high set on October 29.
So far this year, Nvidia has risen by 12%, making it the single largest contributor to the S&P 500 index’s 4.7% gain. Data shows Nvidia alone accounts for about 20% of the index's increase.
(This year, Nvidia's stock has climbed 12%)
Just four weeks ago, Nvidia had fallen 20% from its peak, yet this rally marks its complete breakout from the choppy trading range of the past year, symbolizing the start of a new wave in the US stock market’s AI chip sector.
Investors face a key moment of validation next week, as Microsoft, Amazon, Alphabet, and Meta will each release quarterly earnings reports. The latest signals in AI capital spending will influence the market’s outlook for Nvidia and the entire chip sector.
Philadelphia Semiconductor Index Up 18 Consecutive Days, Sets New Record
Nvidia’s breakout occurred against a backdrop of broad strength in the semiconductor sector.
The Philadelphia Semiconductor Index closed higher for the 18th consecutive trading day, its longest winning streak ever, and technical indicators show its overbought levels are also at historic highs.
This week, Texas Instruments and Intel reported strong earnings, providing additional support for the sector.
Wall Street Journal noted that Texas Instruments issued guidance for second-quarter revenue and profits, both above Wall Street expectations. Its stock surged around 20% on Thursday, its best single-day performance since the bursting of the dot-com bubble, but slipped 1.8% on Friday.
After the US market closed Thursday, Intel posted strong earnings and optimistic guidance. Its stock soared as much as 28% on Friday, its biggest one-day gain since “Black Monday” in 1987, eventually closing up about 21%, breaking the previous historical highs set during the dot-com boom.
Market strategists generally attribute this rally to the continued surge in AI infrastructure investment. Paul Nolte, market strategist at Murphy & Sylvest Wealth Management, said:
The scale of capital flowing into AI is astonishing, and we have yet to see any signs of slowdown. Against this backdrop, it’s no surprise that Nvidia has become a star in the tech stock recovery.
However, he also noted that more data is needed as confirmation:
I am waiting for earnings results to gain a clearer view of capital expenditure trends, but even so, I think Nvidia still has plenty of reasons for optimism.
Microsoft and Other Tech Giants’ Earnings Will Be Next Week’s Key Variable
Besides surging enthusiasm for AI infrastructure, geopolitical factors are also driving investors to seek safe haven in technology sectors backed by solid earnings growth.
Whether the optimism currently felt by the market is sustainable will largely depend on the tech giants’ earnings reports to be released next week.
Microsoft, Amazon, Alphabet, and Meta are the four largest capital spenders in AI infrastructure. Their quarterly results and management's guidance for future investment will provide key direction for the medium-term trend of the chip sector.
Analysts believe that if these companies maintain or increase AI infrastructure spending plans, it will directly reinforce expectations for growing demand for Nvidia. Conversely, any signal of slowdown could place pressure on current valuations.
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