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  • Writer's pictureKevin Hurley

Marketbites: Nvidia Nears $1 Trillion Market Cap


Portfolio Manager Commentary:

The S&P 500 and Nasdaq Composite jumped Thursday as investors cheered the latest quarterly results from Nvidia, fueling a rally in technology stocks. The tech-heavy Nasdaq popped 1.71% and the S&P 500 climbed 0.88% to finish. Those moves also came as U.S. debt ceiling talks appeared to progress. Nvidia shares surged 24.4% a day after the company posted stronger-than-expected revenue guidance, and reported beats on the top and bottom lines in the recent quarter. Exploding demand for Nvidia chips used in artificial intelligence underpinned the quarterly beat. Several analysts covering Nvidia hiked their price targets on the stock following the results. Nvidia’s surge brought the chipmaker within striking distance of a $1 trillion market capitalization.

Other semiconductor stocks and artificial intelligence names followed Nvidia’s lead. Advanced Micro Devices and Taiwan Semiconductor soared 11.1% and 12%, respectively. The VanEck Semiconductor ETF popped 8.6% to close at its highest level of the year; the fund hit a new 52-week high earlier in the session. Alphabet and Microsoft added 2.1% and 3.9%, respectively.

"The macro point is that innovation in technology can outweigh the headwinds of a slowing economy, or higher interest rates," said Dylan Kremer, co-chief investment officer of Certuity. "Technology in particular and growth stocks are not dead."

Uncertainty around the nations debt talks pressured equities throughout this week, with the Dow and S&P 500 on track for weekly losses of 1.98% and 0.97%, respectively. The Nasdaq is up 0.32%.

Chart of the Day:

This is the year that bank stocks became meme stocks. Shares of banks such as PacWest have seesawed wildly since March. Bad news, including lost deposits, has sent them spiraling. Good news, like hints of greater government support, has sent them soaring. The sharp turns have been exaggerated by the same forces that turbocharged GameStop and AMC a couple of years ago: the lightning-fast spread on social media of both fact and rumor, strong interest from individual investors and the use of options and other tools that can amplify the impact of trades.

Source: WSJ

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