By Purvi Agarwal and Niket Nishant
Aug 27 (Reuters) – The S&P 500 and the Nasdaq were set to open higher on Thursday after Nvidia’s blockbuster forecast renewed investor confidence in the AI trade and boosted technology stocks.
Nvidia shares jumped 6.3% in premarket trading, after the chip giant’s robust forecast illustrated relentless demand for AI computing, even as it warned that shortages of memory components could curb the pace of the industry’s growth.
The report met lofty investor expectations and added fuel to the tech rally, underscoring that companies at the heart of AI buildout continue to deliver impressive growth.
“The market rewarded the demand outlook. Nvidia has made quarterly beats routine,” said Matthew Tuttle, CEO of Tuttle Capital Management.
He, however, cautioned that “a company can beat the quarter, raise the outlook, and still leave investors asking harder questions than the ones it just answered.”
U.S. chipmakers Micron Technology and Marvell Technology advanced about 4% each. Data storage firms Sandisk and Western Digital gained slightly more than 4% each.
Salesforce surged 10.5% after raising annual revenue and profit forecasts, and rolling out a new plug-in integrated with Anthropic’s Claude AI models.
CrowdStrike climbed 9.4% after the cybersecurity software provider raised its annual revenue forecast and topped second-quarter earnings estimate.
Both these reports calmed worries that advanced AI tools could upend the traditional software industry, boosting investor appetite for beaten-down software stocks and narrowing the gap with semiconductors, which are seen as the primary beneficiaries of the AI boom.
Other software firms also gained. ServiceNow added 2.5% and Palo Alto Networks gained 5%.
At 08:35 a.m. ET, Dow E-minis were down 63 points, or 0.12%, S&P 500 E-minis were up 28.75 points, or 0.37%, and Nasdaq-100 E-minis were up 278.75 points, or 0.95%.
Moderna slipped 3.3% after unveiling a $2 billion convertible bonds sale, while HP slumped 12% after its PC unit shipments and margins declined in the third quarter.
Discount retailer Dollar General jumped 6% after raising its annual comparable sales forecast.
FOCUS SHIFTS BACK TO MACRO
With Nvidia results out, investor attention turns to Federal Reserve Chair Kevin Warsh’s first Jackson Hole address on Friday for hints on the central bank’s stance on the latest inflation data and the U.S. Treasury’s efforts to tame yields.
“Investors want Warsh to define the key thresholds and datasets that would move him and the committee off a (rate) hold,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial.
“Notably, investors want more clarification on whether he’s still drawing a hard line on the 2% inflation target.”
The Personal Consumption Expenditures data came in slightly hotter than expected on Wednesday, complicating the policy outlook after a benign consumer inflation report earlier this month.
Kansas City Fed President Jeffrey Schmid, in an interview to CNBC, said current interest rates were not restrictive and that he favors hikes to bring inflation closer to the Fed’s target.
Meanwhile, the new number of Americans filing for unemployment benefits fell to 203,000 in the week ended August 22, below 208,000 expected by economists polled by Reuters, data showed on Thursday.
(Reporting by Purvi Agarwal, Niket Nishant and Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar)
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