Global stock markets experienced a significant rebound of £200 billion on Thursday following positive remarks from the CEO of the world’s largest company, dismissing concerns about an artificial intelligence (AI) bubble.
Nvidia, a leading US tech company heavily involved in AI implementation, reported a remarkable 62% increase in sales to £43.6 billion for the three months ending in October. CEO Jensen Huang expressed confidence, stating that they perceive the situation differently from the speculated AI bubble.
The impressive results from Nvidia spurred a surge in global stock markets, with the FTSE All World Index, covering a majority of stock markets worldwide, rising by 0.3%. In the UK, the FTSE 100 surged almost 70 points in mid-morning trading, albeit still distant from its recent near 10,000-point peak.
Recent weeks saw a sharp decline in the value of tech companies, raising concerns about potentially inflated valuations. This led to fears of a market bubble that could potentially burst, impacting a wide range of investors, including small investors and pension funds.
Nvidia’s robust performance also lifted the shares of competitors like Google’s parent company Alphabet and Microsoft. Analysts and market experts welcomed Nvidia’s results, expressing optimism about market response and future prospects despite lingering concerns about the sustainability of AI infrastructure spending growth.
Although some experts remain cautious about the AI bubble, Nvidia’s earnings provided a sense of relief to investors, boosting market sentiment. The positive outcome of Nvidia’s financials reassured the market after a period of uncertainty, demonstrating strength in demand and potential growth opportunities.
Investors, who were apprehensive ahead of Nvidia’s earnings release, found reassurance in the company’s solid performance, fueling optimism and restoring confidence in the market. Victoria Scholar, from Interactive Investor, highlighted the bullish sentiment towards AI stocks following Nvidia’s exceptional earnings, underscoring the company’s ability to surpass high expectations and dispel concerns of overvaluation in the sector.
