Global stock markets experienced a significant rebound of £200 billion on Thursday following positive comments from the CEO of the world’s largest company regarding concerns about an AI bubble.
Nvidia, a prominent US tech company heavily involved in AI technology, reported a remarkable 62% increase in sales to £43.6 billion for the quarter ending in October. CEO Jensen Huang dismissed worries about an AI bubble, stating a different outlook from their perspective.
The impressive results from Nvidia spurred a rally in global stock markets, with the FTSE All World Index, encompassing major global markets, rising by 0.3%. In the UK, the FTSE 100 surged nearly 70 points during mid-morning trading, although it remains below the recent high of almost 10,000 points.
Recent weeks had seen a downturn in the valuations of tech firms, raising concerns about potentially inflated market values. This led to fears of a bubble that could burst, impacting various investors from individuals to pension funds supporting many UK workers.
Nvidia’s strong performance also lifted the shares of competitors like Google parent company Alphabet and Microsoft. Market analysts welcomed Nvidia’s results, seeing them as a positive signal for the market following a period of uncertainty.
While some experts remain cautious about the sustainability of AI growth, others believe that Nvidia’s earnings demonstrate continued demand and potential market upside. The company’s reassuring financials provided a sense of stability to investors, boosting market sentiment.
Victoria Scholar, head of investment at Interactive Investor, praised Nvidia’s impressive earnings, noting the resilience of AI stocks despite recent challenges. She highlighted that the company exceeded high expectations, suggesting that current valuations are justified with room for further growth in the AI sector.