Nasdaq Jumps Nearly 1% as Nvidia's Earnings Beat and Bullish Sales Outlook Eases AI Bubble Worries

NEW YORK — U.S. stocks climbed Thursday, with the Nasdaq Composite leading the way, after blockbuster earnings from Nvidia eased investor concerns that the artificial intelligence spending boom might be losing steam.

The Nasdaq Composite rose 227.04 points, or 0.87%, to 26,357.24 as of 9:41 a.m. Eastern time, building on gains from earlier in the week. The rally was driven largely by strength in technology and chip stocks following a wave of earnings reports from some of the sector's most closely watched companies.

Nvidia headlines a strong tech earnings slate

Nvidia shares surged as much as 7% Thursday after the chipmaker reported an earnings beat and signaled it expects strong AI demand to continue throughout the coming year, according to Yahoo Finance. The results helped ease growing concerns among investors that the AI chip giant would struggle to sustain its rapid pace of growth after several years of extraordinary expansion.

Nvidia Chief Financial Officer Colette Kress signaled strong sales growth heading into fiscal 2028, according to Bloomberg, a forecast that sent the company's shares higher in after-hours trading Wednesday and carried momentum into Thursday's regular session. Futures tied to the tech-heavy Nasdaq 100 index had already climbed roughly 1% in early Thursday trading ahead of the opening bell, reflecting investor relief over the outlook.

Nvidia wasn't alone in powering the rally. Shares of Salesforce and CrowdStrike also jumped sharply after their own earnings reports, with CrowdStrike climbing more than 15% and Salesforce posting a similarly outsized gain, according to Yahoo Finance. Combined, the trio of earnings reports lifted sentiment across the broader technology trade heading into Thursday's session.

A shift from Wednesday's cautious tone

Thursday's rally marked a notable turnaround from the prior session, when markets traded more cautiously as investors awaited Nvidia's results. On Wednesday, stubborn inflation data from the Personal Consumption Expenditures index kept the S&P 500 and Nasdaq hovering near the flatline, with the Dow Jones Industrial Average slipping about 0.2% as traders weighed the implications for the Federal Reserve's policy path ahead of its Jackson Hole gathering.

Wednesday's session also saw Meta shares rise after the company agreed to settle a social media addiction lawsuit for roughly $16.7 billion. The case had centered on allegations from 29 states that Meta designed products intended to hook young users, misled consumers about safety risks, and improperly collected personal data.

Bitcoin extends its rally

The renewed risk appetite among investors extended beyond equities. Bitcoin has staged one of its strongest rallies in years, climbing 23.6% over the past week and breaking through the $80,000 mark for the first time since mid-May, according to comments from Valerio Baselli, a senior international editor, cited by TheStreet. The world's largest cryptocurrency pulled back slightly in premarket trading Thursday but remained well above levels seen just weeks earlier.

All eyes on the Federal Reserve

Even with Thursday's tech-driven optimism, investors remained focused on the Federal Reserve's upcoming Jackson Hole symposium, a closely watched gathering where central bank officials often signal their thinking on future interest rate policy. Wednesday's inflation data, which showed price pressures remaining sticky, added an extra layer of uncertainty heading into the event, tempering enthusiasm somewhat even as tech earnings provided a fresh catalyst for buying.

A pattern of AI-driven volatility

Thursday's gains reflect a broader pattern that has defined markets for much of the year: outsized sensitivity to any signal, positive or negative, about the durability of AI-related spending. Just one day earlier, stocks had traded cautiously specifically because investors were bracing for Nvidia's results, underscoring how central the company has become to overall market sentiment.

That sensitivity cuts both ways. Nvidia and its semiconductor peers have experienced sharp swings throughout the year as investors have alternated between enthusiasm over AI's growth potential and periodic bouts of profit-taking driven by valuation concerns. Morgan Stanley and other major banks have continued to raise price targets on Nvidia even through volatile stretches, reflecting a broadly bullish long-term view among many Wall Street analysts even as short-term trading remains choppy.

Broader market context

The rally in chip and AI-related stocks has also been influenced by policy developments earlier this year, including moves to ease restrictions on chip exports and new AI infrastructure deals involving international partners such as Saudi Arabia. Those developments have periodically boosted sentiment around the durability of the broader "Magnificent Seven" rally that has powered much of the stock market's gains over the past several years, even as questions persist about trade policy and its effects on global technology supply chains.

With Nvidia's results now in hand and delivering the reassurance investors had been seeking, attention is likely to shift toward the Fed's Jackson Hole gathering and any signals central bank officials offer about the future path of interest rates. Given how closely intertwined technology stocks have become with the broader market's overall direction, continued strength in AI-related earnings could help sustain Thursday's rally, while any signs of slowing demand in future reports could just as quickly reverse the current momentum.

For now, Thursday's session offered a clear signal: as long as companies at the center of the AI boom continue delivering results that match or exceed elevated investor expectations, the market appears willing to keep pushing higher, even amid lingering questions about inflation, interest rates and the long-term sustainability of the current technology-driven rally.