Traders on the floor of the New York Stock Exchange on Aug. 4, 2022.
Source: NYSE
S&P 500 futures edged up in overnight trading Wednesday, boosted by a jump in Nvidia shares as the chip giant posted record revenue and issued upbeat guidance.
S&P 500 futures rose 0.5% and Nasdaq 100 futures gained 1%. Futures on the Dow Jones Industrial Average inched down 15 points.
Nvidia shares popped more than 8% in after-hours trading after the chip company said total revenue rose a whopping 265% from a year ago, driven by its booming artificial intelligence business. Nvidia, which has become the fifth-largest company in the U.S. by market capitalization, also forecast another stellar revenue gain for the current quarter, even against elevated expectations for massive growth.
AI enthusiasm has powered the jaw-dropping rally in Nvidia, along with other Big Tech names, over the past year. The chipmaker’s blowout quarter could further boost confidence in the space that has benefited the broader market.
“Bears tried to hit NVDA and sell the news, but there isn’t much to dislike in this report,” said David Russell, global head of market strategy at TradeStation. “There’s potentially a lot of growth ahead for this company with years of AI investment expected.”
The Nasdaq Composite could see a rebound from its three-day losing streak Thursday. So far this week, the tech-heavy index has lost more than 1%.
On Wednesday, minutes from the Federal Reserve’s last meeting showed that central bank officials expressed caution about lowering interest rates too quickly and emphasized the importance of “carefully assessing” incoming data in judging whether inflation is moving down sustainably to 2%.
“Investors should know that the path of disinflation will likely be choppy, creating volatility in the rates market,” said Jeffrey Roach, chief economist at LPL Financial.
On Thursday, investors will be watching for weekly jobless claims data and existing home sales figures from January.
Companies reporting earnings on Thursday include Moderna and Builders FirstSource in the morning, followed by Live Nation, Booking Holdings and Intuit after the close.
Shares of EV players Lucid and Rivian drop
Shares of Lucid Group slid nearly 7% in extended trading after the electric vehicle company posted a revenue miss as losses widened. Lucid reported revenue of $157 million in the latest quarter, lower than an LSEG, formerly Refinitiv, estimate of $180 million.
Rivian Automotive‘s stock plunged 13% after the company reported steep losses and said it would cut 10% of its salaried workforce. Rivian expects EV production this year to be far lower than Wall Street expected, hurt by downtime for factory upgrades and slowing demand for EVs due to high interest rates.
— Yun Li
Nvidia’s Data Center business is up more than 400%
Nvidia’s closely watched Data Center business logged $18.4 billion in fourth-quarter sales, up 409% from the same period in the previous year.
The segment includes the company’s H100 graphics cards that are widely used to power generative artificial intelligence apps such as OpenAI’s ChatGPT.
Nvidia’s data center unit has blossomed, particularly over the past three quarters. It’s the current market leader for supplying computer chips used for AI research and products.
— Yun Li, Jonathan Vanian
