Wall Street Stocks Hit All-Time High as Nvidia Market Cap Surpasses $2.5 Trillion

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US stock indexes hit new all-time highs in early trading on Thursday, boosted by another string of blockbuster results from Nvidia that lifted the chipmaker’s market value above $2.5 trillion for the first time.

Wall Street’s S&P 500 added 0.5 percent to 5,340.26 (a new record) in early New York trading. The tech-dominated Nasdaq Composite gained 1.1 percent.

Nvidia shares rose 7.6 percent after the company late Wednesday announced stronger-than-expected earnings, a 10-for-1 stock split that will boost liquidity, and bullish forward guidance. Revenue soared 262 percent last quarter, beating analysts’ bullish predictions, and the company increased its quarterly cash dividend by 150 percent.

Investors have become hooked on Nvidia as the company has consistently surpassed analysts’ revenue and margin forecasts and emerged as the dominant supplier of graphics processing units that power generative AI.

The tech giant’s results on Wednesday were “perfect,” said Charles-Henry Monchau, chief investment officer at Bank Syz. “There was a lot of earnings enthusiasm and the share price has already doubled since the beginning of the year (but) they managed to outperform it on all counts,” he added.

Its excellent results meant that Nvidia’s market capitalization surpassed $2.5 trillion for the first time on Thursday, surpassing that of Amazon and Tesla combined. Chip companies including ASML, Advanced Micro Devices and Marvell Technology were dragged down by the Nvidia-inspired rally, and the Philadelphia Semiconductor Index, which tracks 30 of the world’s largest semiconductor makers, rose 2.1 percent. hundred.

The market gains came even after the release of minutes from the May 1 Federal Open Market Committee meeting, which revealed that U.S. officials would be willing to raise interest rates again if inflation became more robust. .

“The fact that the Fed minutes showed a hypothetical openness to raising rates again, should inflation remain too high, was something of a wake-up call,” said Mike Zigmont, head of trading and research. by Harvest Volatility Management.

“You have to keep in mind that this is totally reasonable and appropriate thinking and scenario planning for the Fed, but there is something about seeing the hypothetical in the minutes that bothers some investors,” he added.

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