Nvidia drives global stock market rally as artificial intelligence buying spree returns

Nvidia’s numbers highlighted the company’s ongoing position at the top dog in the AI world, says stock market analyst

Nvidia chief executive Jensen Huang. The chip maker's shares have now gained 274% from this time last year on the promise of its artificial intelligence products 

Outsized earnings of chip designer Nvidia has re-sparked a buying frenzy for tech stocks and companies linked to artificial intelligence products, pushing global stock markets much higher. 

Many leading Irish shares also joined in the US and Europe-wide buying spree a day after Nvidia posted quarterly earnings that beat analyst expectations. 

The US chipmaker has been at the heart of the frenzy around artificial intelligence which has helped fuel a remarkable rally for global stock markets. 

Nvidia is in the spotlight because the chip sets it is designing will likely be used by data centres around the world, at a time when artificial intelligence for search functions alone will likely drive huge amounts of additional data traffic on servers across the globe. 

"Nvidia earnings appeared to have given global markets a new lease of life, as a huge surge in earnings brought a collective sigh of relief," said Joshua Mahony, chief market analyst at online trading firm Scope Markets.  

"Nvidia’s numbers highlighted the company’s ongoing position at the top dog in the AI world," he said. 

The latest earnings of Nvidia, unveiled late Wednesday night, had come under intense scrutiny on concerns that the stock market bubble around AI-linked shares was about to burst. 

The company nonetheless forecast current-quarter revenue of $24bn (€22.19bn). Analysts on average were expecting revenue of $22.17bn.

As a leading member of the so-called Magnificent 7 group of stocks, which includes Microsoft, Apple, Amazon, and Google-owner Alphabet, the US chipmaker is at the centre of the AI frenzy.

Nvidia shares jumped 14% on Thursday, helping pull up many of the of the Magnificent 7 stocks in its wake. 

Shares in Microsoft, which has been closely linked to AI products, climbed 2% at one stage, although the gains for Apple were more modest. Shares in Intel -- a rival to Nvidia and which is not among the Magnificent 7 -- fell on the Nvidia earnings. These three companies between them account for around 14,000 jobs in Ireland. 

Nvidia shares are now trading 274% higher than this time last year. 

In the US, the S&P 500 index traded at a fresh record high, and in Europe, the Stoxx 600 index rose by around 1%.