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Nvidia earnings fuel global AI equity rally

US stocks advanced on Wednesday and Asian markets were trading mostly higher on Thursday as Nvidia’s stronger-than-expected quarterly results and upbeat outlook reinforced confidence in the durability of AI-related investment. The chipmaker’s earnings, driven by rapid growth in data centre demand from major cloud providers, lifted sentiment towards technology suppliers in Asia, where Japanese and South Korean benchmarks reached record levels. Meanwhile, the US Dollar Index continued to slide, Treasury yields were drifting slightly lower, gold prices were pushing higher to around USD 5200 per ounce and bitcoin jumped to about USD 68,300.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

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US semiconductor group Nvidia reported a 73% jump in fiscal fourth-quarter revenue to USD 68.13 billion on Wednesday, driven by a 75% increase in data centre sales to USD 62.3 billion, compared with USD 39.3 billion in total revenue a year earlier. Net income almost doubled to USD 43 billion from USD 22.1 billion in the same quarter last year, as the company benefited from surging demand for its artificial intelligence accelerators from major cloud providers such as Alphabet, Amazon, Meta and Microsoft. Nvidia also set fiscal first-quarter revenue guidance of about USD 78 billion, well above market expectations. The company's stock rose about 1% in pre-market trading on Thursday after gaining 1.4% on Wednesday.

Asia stocks lifted by Nvidia optimism

Asian equity markets advanced on Thursday, with Japan’s Nikkei 225 reaching a record high as the nomination of two dovish academics to the Bank of Japan cooled expectations for further rate increases and weakened the yen, supporting exporters. The Nikkei 225 was trading 0.4% higher. South Korea’s KOSPI also hit a record, jumping 3.7% as Nvidia's earnings the day before fuelled gains in key suppliers Samsung Electronics and SK Hynix, which both moved to all-time highs. Broader regional performance was mixed, with Australia’s ASX 200 up 0.5% on sustained strength in mining and banking shares. Chinese indices paused after a recent holiday-driven rally, with the mainland CSI 300 down 0.2%, and Hong Kong’s Hang Seng slipped 0.9% on profit-taking in technology stocks, including Baidu ahead of its fourth-quarter results.

US stocks rise ahead of Nvidia results

US equity markets advanced on Wednesday as investors positioned themselves for quarterly figures from chipmaker Nvidia, which came after the bell. The Dow Jones Industrial Average closed 0.6% higher at 49,482.15 points, the broad S&P 500 gained 0.8% to 6946.13, and the technology-heavy Nasdaq 100 rose 1.4% to 25,329.04 points, extending gains from Tuesday. Nvidia shares added 1.4% as market participants looked for not just strong results but a markedly upbeat outlook to sustain enthusiasm for AI-related spending, while some relief also came from US President Donald Trump’s State of the Union address on Tuesday, which contained no new tariff threats following a recent Supreme Court ruling curbing his ability to impose duties unilaterally.

Euro-area inflation slows in January

Euro-area annual inflation eased to 1.7% in January, down from 2% in December and from 2.5% a year earlier, according to data released by Eurostat on Wednesday. Annual inflation in the European Union also moderated to 2% from 2.3% in December and 2.8% a year earlier. Services made the largest positive contribution to euro-area inflation in January, followed by food, alcohol and tobacco, while energy prices exerted a significant negative contribution. European stock markets ended Wednesday in positive territory. The Euro Stoxx 50 added 0.9%, while Germany’s DAX increased 0.8% to 25,175.94 points and France’s CAC 40 gained 0.5%. In Switzerland, the Swiss Market Index slipped 0.1%, lagging its eurozone peers despite the broader risk-on tone.

German growth improves but consumer mood fragile

Germany’s gross domestic product rose 0.3% in the fourth quarter versus the previous three months, according to detailed figures released on Wednesday, matching the earlier estimate and resulting in full-year growth of 0.2%. The quarterly expansion was supported mainly by stronger private and public consumption and an increase in construction investment, while exports fell 0.6%. On a year-on-year basis, GDP increased 0.6%, as higher output in most service sectors and construction offset marginally lower employment and flat hourly productivity. Despite the improvement in output, consumer sentiment remained weak, with the Consumer Climate indicator for March slipping 0.5 points to -24.7 as households’ greater inclination to save amid persistent price concerns and political and economic uncertainty partly offset modestly better income expectations.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Allianz, AXA, Deutsche Telekom, ENI, Intuit, Munich Re, and Schneider Electric.

Economic data in focus: European Central Bank President Christine Lagarde speaks (09:30) and US weekly initial jobless claims (14:30).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.