In a dramatic late-day reversal, shares of the world's largest technology companies surged on Wednesday after chipmaking giant Nvidia Corp. delivered a stunning revenue forecast that reassured investors worried about the sustainability of the global artificial intelligence spending boom.
Nvidia's Blockbuster Outlook
The Santa Clara-based company, widely viewed as a barometer for the AI revolution, projected sales of approximately $65 billion for its fiscal fourth quarter running through January. This figure significantly exceeded the average analyst estimate of $62 billion and sent Nvidia shares spiking about five percent in after-hours trading.
Nvidia CEO Jensen Huang declared in the company's statement that "compute demand keeps accelerating" and emphasized that "AI is going everywhere, doing everything, all at once." This confident assessment helped counter growing concerns that the massive global investment in AI infrastructure might be poised to fizzle.
Market Impact and Recovery
The positive sentiment immediately spread across markets. A roughly $390 billion exchange-traded fund tracking the Nasdaq 100 advanced one percent after the close of regular trading, while the S&P 500 rose to around 6,642, halting a four-day slide that had been driven by investor anxiety.
Chris Zaccarelli at Northlight Asset Management explained the recent market psychology: "Market psychology has been negative this month as investors worried that the artificial-intelligence infrastructure build out was a bubble. In the meantime, the largest technology companies in the world are extremely profitable."
Broader Economic Context
The rally occurred against a complex economic backdrop. Federal Reserve officials indicated in recently released minutes from their October meeting that they would likely keep rates steady for the remainder of 2025. This hawkish leaning came as traders had nearly priced out a rate cut for next month.
David Russell at TradeStation noted the challenging environment: "Uncertainty is running high because of the lost data and the unclear impact of tariffs. There's no consensus at the Fed with policymakers flying blind, but these minutes lean hawkish overall."
Meanwhile, other market indicators showed mixed movements. The yield on 10-year Treasuries rose two basis points to 4.13 percent, oil prices declined due to rising fuel inventories, and Bitcoin sank below the $90,000 threshold.
Despite the recent volatility, Zaccarelli maintained an optimistic longer-term view: "While a market pullback can happen at any time, as long as the economy can stay out of a recession, I expect the bull market to resume and hit new all-time highs later this year and into next year."
