Nvidia results trigger a nearly $300B AI stock rally

Wednesday's extended trading saw a surge in AI-related stocks, increasing the market capitalization by nearly $300 billion.

This came after chipmaker Nvidia Corp. predicted significant revenue growth and announced that it was increasing production of its AI chips to keep up with rising demand.

Nvidia's stock soared as much as 28% after the bell to hit an all-time high of $391.50. This increased the Silicon Valley company's stock market value by about $200 billion to over $960 billion, extending its lead as the most valuable semiconductor company and the fifth-most valuable company on Wall Street.

With all the excitement surrounding AI and the fact that Nvidia delivered a huge beat for first-quarter results and second-quarter estimates, according to Daniel Morgan, senior portfolio manager at Synovus Trust in Atlanta, this provides some concrete evidence that AI is for real. Morgan claimed Synovus is a shareholder in Nvidia.

To meet the soaring demand for its data centre chips, the company, according to Chief Executive Officer Jensen Huang, is significantly increasing supply. Nvidia's quarterly revenue projections were over 50% higher than Wall Street's expectations.

As a result of Nvidia's impressive report, shares of other AI-related businesses increased, adding almost $100 billion to the value of the stock market after the bell.

Competitor AMD raised its prices 10%. Both Alphabet Inc., the parent company of Google, and Microsoft Corp. saw increases of about 2%. These businesses are working quickly to include generative AI in their web search platforms.