The S&P and the Nasdaq at record levels with Nvidia – 05/23/2024 at 4:05 p.m.

The S&P and the Nasdaq at record levels with Nvidia – 05/23/2024 at 4:05 p.m.
The S&P and the Nasdaq at record levels with Nvidia – 05/23/2024 at 4:05 p.m.

A trader monitors his screen at the New York Stock Exchange

The New York Stock Exchange opened in mixed order on Thursday, the positive trend being supported by a rally in stocks linked to semiconductors and artificial intelligence (AI) following the publication of Nvidia’s results and forecasts.

In early trading, the Dow Jones index fell 100.21 points, or 0.25%, to 39,570.83 points.

The broader Standard & Poor’s 500 rose 0.42% to 5,329.58 points, while the Nasdaq Composite gained 1%, or 168.18 points, to 16,969.73, the latter two indices having recorded records at the opening.

A sign of the enthusiasm of market operators, the volatility index fell by 3.01% to 11.92 points, after hitting a low since November 2019, at 11.63 points.

The American chip giant for AI on Wednesday communicated a turnover forecast for the current quarter that was higher than expected and announced a split by ten of the nominal value of its shares.

Nvidia shares climb 8.54% to $1,030.60, the first time above the $1,000 threshold, representing an increase in its market capitalization of more than $165 billion.

In its wake, Advanced Micro Devices, Micron Technology, Broadcom and Arm Holdings rose from 1.21% to 3.23%, while the technology news index (+1.83%) and the semiconductor index (+ 2.13%) are also well oriented. The sector is also boosted by TSMC, which progresses by 1.47%. The Taiwanese chip manufacturer, one of the main suppliers to Apple and Nvidia, announced Thursday that it anticipates annual growth of 10% in its turnover in semiconductors, excluding memory chips.

Mark Haefele of UBS Global Wealth Management believes that global tech valuations of a 24x price-to-earnings ratio for 2025 appear reasonable given recent revised 2024 earnings estimates from some big tech names.

The intermediary also notes that new AI features recently announced by tech giants could support consumer demand.

“We believe that broader adoption of AI, particularly in audio conversations, should accelerate generative AI in sectors like health, education and services,” Mark Haefele wrote in a note.

UBS expects global chip sector profits to grow 50% this year and 25% in 2025.

In other corporate news, Dupont De Nemours dropped 0.41% after announcing its intention to split into three independent entities.

Live Nation, the owner of Ticketmaster, declined 3.89% after Bloomberg information according to which the US Department of Justice could request the dismantling of the company to end its quasi-monopoly on the sale of concert tickets.

(Writing by Claude Chendjou, edited by Kate Entringer)

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