TLDR
- Nvidia stock jumped over 7% after beating earnings and signaling strong AI demand into next year
- Salesforce and CrowdStrike also posted strong earnings, boosting software and tech stocks broadly
- The Nasdaq rose 1.3%, the S&P 500 gained 0.7%, while the Dow hovered near flat
- Nvidia reportedly agreed to acquire AI platform Hugging Face for $12.9 billion
- All eyes now turn to Fed Chair Kevin Warsh’s Jackson Hole speech on Friday
Nvidia shares surged more than 7% on Thursday after the chipmaker reported better-than-expected earnings and gave a confident outlook on AI demand. The results calmed fears that the company’s growth could be slowing down.
The strong report sent ripples across the tech sector. Marvell Technology also rose on its own results, and the iShares Semiconductor ETF returned to rally mode after trading sideways for months.
Salesforce shares jumped over 21% after its earnings report. That helped push software stocks higher across the board, with the iShares Expanded Tech-Software Sector ETF approaching its mid-August high.
CrowdStrike also posted strong earnings, with its stock gaining more than 18%. The cybersecurity company added to the positive mood in the tech space on Thursday.
Broader Market Reaction
The Nasdaq Composite rose 1.3% on the back of the tech gains. The S&P 500 was up around 0.7%, while the Dow Jones Industrial Average added about 0.4%, lagging behind the tech-heavy indexes.
Beyond tech, much of the market appeared to be in a holding pattern. Traders are waiting for Federal Reserve Chair Kevin Warsh to speak at the Jackson Hole Symposium on Friday.
Bond yields have steadied after rising sharply last week. Investors have been watching Treasury market moves closely and trying to gauge whether the Fed will hold interest rates steady.
Weekly jobless claims came in at 203,000, ticking down from the prior week. That was seen as a positive sign for the labor market heading into the Jackson Hole event.
Nvidia’s Hugging Face Deal and AI Comments
On Wednesday night, reports emerged that Nvidia agreed to acquire Hugging Face, an open-source AI model platform, for $12.9 billion. The deal has not been officially confirmed.
Nvidia CEO Jensen Huang addressed the company’s AI investment strategy on the earnings call. He said his only regret was not investing more and sooner in AI labs.
Retail Earnings in Focus
Dollar General and Dollar Tree both reported better-than-expected earnings. The two discount retailers said they have been attracting higher-income shoppers, which helped boost their results.
Despite both beating estimates, their stocks moved in different directions. The gap came down to differences in their forward outlooks rather than past performance.
Technical analyst Frank Cappelleri noted that software stocks were among the biggest movers of the day. He pointed out that the software ETF held support after June’s pullback and broke out to the upside.
The semiconductor ETF also returned to rally mode. If Warsh’s speech on Friday signals a steady rate path, markets could see more follow-through into next week.
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