Global stock markets experienced a significant rebound of £200 billion on Thursday following reassuring comments from the CEO of the world’s largest company dispelling concerns of an artificial intelligence (AI) bubble.
Nvidia, a prominent US tech giant heavily involved in AI technology, reported a remarkable 62% increase in sales to £43.6 billion for the three months ending in October. CEO Jensen Huang expressed confidence in the market outlook, stating, “There has been a lot of talk about an AI bubble. From our vantage point, we see something very different.”
The positive results from Nvidia had a ripple effect on global stock exchanges. The FTSE All World Index, representing a majority of global markets, saw a 0.3% increase. In the UK, the FTSE 100 surged nearly 70 points during mid-morning trading, although it remains below recent peaks.
Recent concerns about overvaluations in the tech sector had led to a decline in the value of technology companies. However, Nvidia’s robust performance not only boosted its own shares but also had a positive impact on competitors like Google’s parent company Alphabet and Microsoft.
While some analysts remain cautious about the sustainability of AI growth, others view Nvidia’s earnings as a sign of strong demand, providing potential upside for investors. The market response to Nvidia’s results was largely positive, bringing a sense of stability after a period of volatility.
Investors, who had been apprehensive before Nvidia’s earnings release, found reassurance in the company’s solid financial figures. The positive outcome has reinvigorated market sentiment and renewed confidence in the AI sector’s potential.
Victoria Scholar, head of investment at Interactive Investor, noted that Nvidia’s outstanding earnings had silenced skeptics and reignited optimism among AI investors. Despite previous concerns about overvaluations and market bubbles, Nvidia’s performance suggests that high valuations are justified, hinting at further growth opportunities for AI-related stocks.