Wall Street stocks hit record high as Nvidia market cap powers past $2.5tn

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US stock indices rose to fresh all-time highs in early trading on Thursday, boosted by another set of blockbuster results from Nvidia that pushed the chipmaker’s market value above $2.5tn for the first time.

Wall Street’s S&P 500 added 0.5 per cent to 5340.26 — a new record — in early New York trading. The tech-dominated Nasdaq Composite gained 1.1 per cent.

Shares in Nvidia jumped 7.6 per cent after the company late on Wednesday announced stronger than expected earnings, a liquidity-raising 10-for-1 stock split and bullish forward guidance. Revenues soared 262 per cent over the past quarter, exceeding analysts’ bullish predictions, and the company raised its quarterly cash dividend by 150 per cent.

Investors have become hooked on Nvidia as the company has consistently blown past analysts’ revenue and margin forecasts and emerged as the dominant provider of graphics processing units that power generative AI.

The tech giant’s results on Wednesday were “perfect”, said Charles-Henry Monchau, chief investment officer at Bank Syz. “There was a lot of hype ahead of earnings and the stock price has already doubled since the start of the year [but] they managed to beat by all counts,” he added.

Its bumper results meant Nvidia’s market cap on Thursday surpassed $2.5tn for the first time, making it larger than Amazon and Tesla combined. Chip companies including ASML, Advanced Micro Devices and Marvell Technology were swept up in the Nvidia-inspired rally, with the Philadelphia Semiconductor index, which tracks 30 of the world’s biggest semiconductor manufacturers, rising 2.1 per cent.

The market gains came even after the release of the minutes of the May 1 Federal Open Market Committee meeting, which revealed that US officials would be ready to raise interest rates again if inflation became more robust.

“The fact that Fed minutes showed a hypothetical openness to hiking rates again, should inflation remain too high, was a bit of a wake-up call,” said Mike Zigmont, head of trading and research at Harvest Volatility Management.

“Keep in mind this is totally reasonable and appropriate thinking and scenario planning for the Fed, but there’s something about even seeing the hypothetical in the minutes that bothers some investors,” he added.