Asian Chip Stocks Rally Following Nvidia's Positive Sales Forecast

Asian chip stocks experienced a significant rally following Nvidia's strong third-quarter earnings report. According to CNBC, Nvidia's forecast not only exceeded Wall Street's expectations but also indicated robust sales in the fourth quarter, signaling continued demand for AI technologies.

The company's reported revenue of $57 billion for the third quarter was a staggering 62% increase from the same period last year, and profit surged to $31.9 billion, up 65%. This performance has alleviated recent concerns about an AI bubble that had led to declines in tech shares.

In response to Nvidia's optimistic projections, key Asian chip manufacturers saw their stock prices rise sharply. For instance, South Korea's SK Hynix, Nvidia's top supplier of high-bandwidth memory used in AI applications, saw its shares increase by nearly 2%.

Similarly, Samsung Electronics, which also supplies memory to Nvidia, recorded a more than 5% rise as the company aims to catch up to SK Hynix's market position. Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker and a primary producer of Nvidia's chips, rose over 4%, underscoring the interdependence within the semiconductor supply chain.

Analysts like Rolf Bulk from New Street Research indicated that Nvidia's strong results would likely lead to higher earnings estimates across the sector, including for TSMC and other memory vendors. In Japan, Renesas Electronics, another key supplier to Nvidia, saw a modest gain of 1.51%, while Tokyo Electron, a provider of essential chipmaking equipment, surged by 5.67%.

Lasertec, another Japanese chip equipment maker, climbed over 6%. The positive momentum extended to major tech companies, with stocks of Apple, Microsoft, Alphabet, Amazon, and Meta experiencing gains after Nvidia's announcements.

Meanwhile, SoftBank, despite recently selling its shares in Nvidia, saw its stock rise nearly 7% at one point, as it remains invested in several AI ventures involving Nvidia's technology. The rally reflects not just a momentary surge but a broader trend that highlights the growing demand for AI technology across various sectors, further intertwining the fates of these companies in the semiconductor ecosystem.

Overall, the market's reaction to Nvidia's positive sales forecast serves as a crucial indicator for investors monitoring the tech sector's health and future potential.