Nvidia Ignites AI-Related Stock Rally After ‘Blow-Out’ Forecast

(Bloomberg) — Nvidia Corp. results showing that customers are binging on chips used in artificial intelligence computing sent a complex of stocks tied to the burgeoning technology soaring.

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Nvidia gained as much as 29% after hours in New York on Wednesday, while an exchange-traded fund that tracks semiconductor makers jumped more than 3%. Nvidia rival Advanced Micro Devices Inc. advanced 10% and Taiwan Semiconductor Manufacturing Co., which manufactures Nvidia’s chips, gained 8% in late US trading.

Read more: Nvidia Soars After AI-Fueled Forecast Shatters Expectations

“Truly spectacular orders coming through for NVDA’s A100 and H100 AI chips,” said Amir Anvarzadeh, a strategist at Asymmetric Advisors Ltd. in Singapore. “More importantly for Asian equity investors, they point out that all the orders are being passed on to TSMC,” which has “more than adequate” capacity to fill the orders.

In early Asian trading, Nvidia equipment supplier Advantest Corp. surged as much as 20% to an all-time high in Tokyo. Memory-chip maker SK Hynix Inc. jumped 6.8% in Seoul.

“SK Hynix almost exclusively supplies the high-bandwidth standard chip that goes into Nvidia’s GPU, and expectations for the HBM chips have risen,” said Lee Seung-Woo, an analyst at Eugene Investment & Securities Co.

Investors were looking to Nvidia for evidence that the surge in interest in artificial intelligence this year is resulting in higher sales of chips that provide the computing power. The semiconductor maker delivered that and more with a revenue forecast for the current quarter that dwarfed the average analyst estimate.

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Nvidia “provided blow-out guidance, powerfully underscoring the bull thesis that this company sits at the heart of one of tech’s seminal transition points,” said Adam Crisafulli, founder of newsletter Vital Knowledge.

–With assistance from Youkyung Lee.

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