Chipmaker Nvidia's Surge Powers Tech Stocks

Nasdaq jumps 1.7%, even as the Dow slips a bit
By Newser Editors and Wire Services
Posted May 25, 2023 3:15 PM CDT
Chipmaker Nvidia's Surge Powers Tech Stocks
Traders work on the floor at the New York Stock Exchange in New York, Thursday, May 25, 2023.   (AP Photo/Seth Wenig)

Wall Street's building mania around artificial intelligence helped lift the stock market Thursday, even as worries worsen about political rancor in Washington. The benchmark S&P 500 rose 36 points, or 0.8%, to 4,151 after chipmaker Nvidia gave a monster forecast for upcoming sales as it benefits from the tech world's rush into AI. That also helped the tech-heavy Nasdaq rise 213 points, or 1.7%, to 12,698. The Dow, meanwhile, fell 35 points, or 0.1%, to 32,764. Because it's one of Wall Street’s most valuable stocks, Nvidia's 25.3% surge was the strongest force pushing upward on the S&P 500, per the AP.

The company's forecast of roughly $11 billion in revenue for the current quarter blew past analysts’ expectations for less than $7.2 billion. Nvidia's stock has already more than doubled this year, and its total value is approaching $1 trillion. Stocks of other chip makers also charged higher after Nvidia described a race by its customers to put AI “into every product, service and business process.” Advanced Micro Devices gained 9.9%. Big Tech stocks in general rallied, adding to recent gains fueled by AI excitement. The field has become so hot that critics warn of a possible bubble, while supporters say it could be the latest revolution to reshape the global economy. Microsoft gained 3.5%, and Google’s parent company, Alphabet, rose 1.7%.

They helped lift indexes even as the majority of stocks fell on worries about the US government edging closer to a possible default on its debt. Washington could run out of cash to pay its bills as soon as June 1, unless Congress allows it to borrow more. On the losing end of Wall Street was Dollar Tree, which fell 10.2%. The retailer reported weaker profit for the latest quarter than analysts expected. It said its customers are shifting spending toward products that are less profitable for it, and it's also contending with worse-than-expected theft like other retailers.

(More stock market stories.)

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