Wall Street investors are likely to keep their eyes locked on the stocks of tech majors like Intel Corp., Advanced Micro Devices Inc., and Micron Technology Inc. on Thursday.
Pre-market activity indicated that all three scrips were set for a strong opening. Shares of AMD were up nearly 4.5% at $233.6 apiece as of 7:49 a.m. EST, while those of Intel and Micron traded 2.27% and 2.66% up at $35.85 and $231.98, respectively.
AMD declined nearly 3% to settle at $223.55 on Wednesday, whereas Micron’s stock also closed 1.13% lower at $225.92. However, Intel had closed in the green, up 2.27% at $35.11.
Meanwhile, Nvidia’s stock was up nearly 5.18% higher in pre-market trade at $196.23.
The main driver for AMD, Micron and Intel’s expected rally is bellwether Nvidia’s robust third quarter earnings. The titan chipmaker beat estimates by reporting a 62% year-on-year surge in its revenue to $57 billion.
Nvidia’s net income also soared 65% in the quarter under review, compared to $19.31 billion in the year-ago period.
These financials eased the ‘AI bubble’ anxieties and restored the faith of investors in AI-linked tech companies.
The ‘AI bubble’ essentially refers to the possibility of the AI boom having outrun the fundamentals, where the stock valuations of AI-linked tech companies are seen as inflated as compared to their profit and revenue.
Jensen Huang, CEO and founder, Nvidia commented on the so-called ‘AI bubble’ in post earnings concall. “There’s been a lot of talk about an AI bubble. From our vantage point, we see something very different. As a reminder, Nvidia Corporation is unlike any other accelerator. We excel at every phase of AI.”
The company is targeting approximately $65-billion revenue for the fourth quarter, as per Colette Kress, chief financial officer and executive vice president of Nvidia.