A microchip and the Nvidia logo displayed on a phone screen are seen in this photo taken in Krakow, Poland, on April 10, 2023.
Nurphoto | Getty Images
Artificial intelligence and semiconductor chip stocks rallied after the U.S. chip design firm Nvidia it beat Wall Street expectations for fourth-quarter earnings and revenue on Wednesday and expects “continued growth” in 2025 and beyond.
Nvidia supplier Taiwanese semiconductor manufacturing company jumped as much as 2.05% in Thursday morning trading. TSMC is the world’s largest contract chipmaker, producing advanced processors for companies like Nvidia and the iPhone maker Apple.
Server component vendor actions Supermicrocomputer rose 11.42% in after-hours trading on Wednesday. Dutch chip equipment manufacturer ASMLwhich supplies TSMC lithography machines critical to chip production, jumped 2.7% in the United States in after-hours trading.
After Nvidia’s earnings report, rivals Advanced microdevices and SoftBank-backed British chip designer Arm holds rose 4.08% and 7.87% respectively in after-hours trading.
Nvidia, which designs custom AI chips for the likes of Amazon, Microsoft and Google, has seen skyrocketing demand for its graphics processing units thanks to the artificial intelligence boom.
OpenAI’s ChatGPT, which gained massive worldwide popularity in November 2022 for its ability to generate human-like responses to user prompts, is trained and run on thousands of Nvidia GPUs. Nvidia shares rose 9% in extended trading.
South Korean memory chip makers Samsung Electronics and SK Hynix gained 0.41% and 3.22%, respectively, on Thursday. Large language models like ChatGPT rely on high-performance memory chips to remember details of past conversations and user preferences in order to generate human responses.
Fellow Taiwanese semiconductor companies Orient Semiconductor Electronics and MediaTek rose 2.94% and 1.53%, respectively, on Thursday.
Intel, Broadcom AND QualcommThree U.S. chipmakers saw stock price increases in extended trading on Wednesday, rising 1.38%, 2.79% and 1.80%, respectively.
“Fundamentally, conditions are excellent for continued growth” in 2025 and beyond, Nvidia CEO Jensen Huang told analysts on an earnings call Wednesday. He added that demand for Nvidia GPUs will remain high due to generative artificial intelligence and an industry-wide shift from central processors to Nvidia-made accelerators.
“If you just put a full stop to the conversation, whether it’s related to market share or margins, I think it would surprise people,” Gene Munster, managing partner of Deepwater Asset Management said Thursday on the “Street Signs Asia” program ” from CNBC.