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Tech Stocks Soar as Nvidia Smashes Earnings Expectations

Miguel A. Rodriguez
Miguel A. Rodriguez
23 February 2024

Discover how Nvidia's impressive Q4 earnings and positive outlook for AI development have sparked investor optimism and its impact on the broader tech sector. Read on to uncover the exciting trends shaping the market and get your daily market news with CAPEX.com.

A Game-Changing Performance by Nvidia Energizes Tech Stocks

Nvidia's stock (NVDA) soared over 15% to new all-time highs after the chipmaking giant reported better-than-expected fourth-quarter earnings and projected first-quarter revenue of around $24 billion. This outperformance, fueled by surging demand for AI development chips, signals robust profit growth ahead for Nvidia.

The strong earnings and outlook indicated that the company expected to continue growing due to increased demand for AI development, as it is one of the leading producers of chips specifically geared toward language models.

Nvidia's gains spread to other major tech stocks, as investors expect demand for AI to also boost the broader tech sector in the coming months. Alphabet (GOOG), Microsoft (MFST), and Meta Platforms (META) posted gains between 0.50% and 4% and all three have artificial intelligence products in the pipeline.

More AI Pioneers to Keep on Your Watchlist

 

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Nvidia daily chart, February 22, 2024. Source: CAPEX.com WebTrader.

Technology Stocks Propel North American Indices

The North American stock indices were driven upward by this good performance of technology companies with the Nasdaq 100 index advancing more than 1.5%, ending the downward correction of recent days.

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Nasdaq100 daily chart, February 23, 2024. Source: CAPEX.com WebTrader.     

 

Economic Indicators Reinforce Fed's Cautious Stance

Economic data released yesterday showed that the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth likely remained strong in February. In addition, the PMI data for both manufacturing and services showed good performance of the North American economy, especially in the manufacturing sector with a PMI of 51.5.

This strong economic data confirms the sense of caution about future monetary policy, which followed the Federal Reserve's minutes, released on Wednesday, which largely reiterated the Central Bank's stance of not lowering interest rates until have greater confirmation that inflation reaches the 2% target.

As a result, the US dollar strengthened, dragging down the EUR/USD pair, which lost around 80 pips on the day from the highs of 1.0888.

 

Key Takeaways

  • Nvidia's outstanding earnings and positive outlook drive shares up by over 15%.
  • Tech stocks, including Alphabet, Microsoft, and Meta Platforms, also benefit from increased demand for AI solutions.
  • The Nasdaq 100 index surges, signaling a positive market sentiment for the broader tech sector.
  • Economic data reveals a decline in unemployment claims and robust manufacturing sector performance.
  • The Federal Reserve reaffirms its cautious stance on interest rates, emphasizing the need for confirmation of inflation reaching the 2% target.
  • The strengthening US dollar impacts the EUR/USD pair, which experiences a decrease in value.

 

Sources: Bloomberg, Reuters

 

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Miguel A. Rodriguez
Miguel A. Rodriguez
financial_writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.