Global stock markets experienced a significant rebound of £200 billion on Thursday following reassuring comments from the CEO of the world’s largest company regarding concerns over an AI bubble.
Nvidia, a prominent US tech firm heavily involved in artificial intelligence technology, reported a remarkable 62% surge in sales to £43.6 billion for the three months ending in October. CEO Jensen Huang expressed confidence in their position, stating a different perspective from the speculated AI bubble.
The positive outcomes from Nvidia’s earnings report sparked a global stock market rally, with the FTSE All World Index, encompassing major global markets, seeing a 0.3% increase. In the UK, the FTSE 100 surged nearly 70 points during mid-morning trading, although it remains below the recent peak of nearly 10,000 points.
Market concerns over inflated valuations of tech companies led to significant value reductions in recent weeks, fueling worries of a potential bubble burst impacting various investors, including pension funds. However, Nvidia’s robust performance had a ripple effect, boosting the shares of competitors like Google’s parent company Alphabet and Microsoft.
While some analysts remain cautious about the sustainability of AI-related spending growth, others view Nvidia’s results positively. Market experts believe that despite lingering fears of an AI bubble, the strong demand signals potential market upside.
Investment professionals noted a sense of relief in the market following Nvidia’s reassuring earnings, which exceeded expectations and provided a positive outlook for AI stocks. The results have reinvigorated investor confidence and alleviated concerns of a market pullback.
In conclusion, Nvidia’s impressive financial performance has instilled optimism in the market, countering recent uncertainties and reinforcing the potential for further growth in the AI sector.