NEW YORK: The benchmark S&P 500 index hit a fresh record high on Thursday after a blowout revenue forecast from AI darling Nvidia boosted investor confidence in the sector and sparked a rally in growth and technology stocks.

Nvidia galloped to $2 trillion market value as its shares surged 15.2 per cent after the chip designer forecast a roughly three-fold surge in first-quarter revenue on strong demand for its AI chips and beat expectations for fourth-quarter revenue.

This pushed the benchmark S&P 500 up 1.71pc at 11:34am ET, to an all-time high of 5,066.81 points.

Nvidia’s earnings were a major test for the AI-fuelled rally on Wall Street that first pushed the S&P 500 above the 5,000 point mark earlier this month. Some analysts had cautioned that disappointing results could spark a steep selloff among technology stocks.

“The whole package of Nvidia’s reporting lends a bedrock of credibility for other AI and technology companies as it clearly appears that Nvidia and AI are here to stay,” said Andre Bakhos, president at Ingenium Analytics.

The Dow Jones industrials also hit a record high of 38,994.50 points earlier in the day and was last up 280.22 points, or 0.73pc, at 38,892.46. The Nasdaq Composite was up 380.60 points, or 2.44pc, at 15,961.47.

Nvidia was set to add over $250 billion to its market capitalisation if gains held, beating Meta Platform’s $196bn surge earlier this month in the biggest one-day gain by any company in Wall Street history.

Published in Dawn, February 23rd, 2024