Traders work on the floor of the New York Stock Exchange.
Stock futures ticked higher in premarket trade on Thursday, with investors focusing on key second-quarter results from chipmaker Nvidia to gauge whether the AI excitement is more than just hype.
All eyes on Wall Street were keenly awaiting Nvidia’s second-quarter results after the closing bell, and it didn’t disappoint. The company earned $2.70 per share after adjustments on $13.51 billion in revenue. That topped the average analyst estimate from Refinitiv of $2.09 per share in profits and $11.22 billion in revenue.
Nvidia’s stellar first-quarter report in May had helped stoke investor interest in artificial intelligence, which became a key market driver in the first half of the year. Interest in the chip stock catapulted its value to more than $1 trillion.
Nvidia once again raised its forecast, with executives predicting third-quarter revenue would climb to $16 billion, or an increase of 170% on an annual basis.
“The entire tech sector and overall market was waiting for Nvidia with this being the purest and best barometer for AI demand and the results/guidance were a ‘drop the mic’ moment in our opinion that will have a ripple impact for the tech space for the rest of the year,” said Dan Ives, senior equity research analyst at Wedbush Securities.
Elsewhere, the broader field of semiconductor stocks were also trading higher in after hours trading. Shares of Taiwan Semiconductor added 3.1%, while AMD climbed nearly 4%. Marvell Technology gained 5.4%.
Investors also await comments from Federal Reserve Chair Jerome Powell from Jackson Hole, Wyoming, on Friday, which Wall Street hopes will provide insight toward the path of benchmark interest rates.