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Nvidia Asian suppliers rise on positive Q1 earnings, outlook

Published 23/05/2024, 04:36
© Reuters
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Investing.com-- Shares of Nvidia’s Asian suppliers rose on Thursday, cheered by the prospect of sustained demand from the artificial intelligence industry as the chipmaker clocked stronger-than-expected quarterly earnings.

NVIDIA Corporation (NASDAQ:NVDA) surged to a record high in aftermarket trade, after its first-quarter earnings beat expectations and as the firm also offered robust revenue guidance for the current quarter. 

The firm also announced a 10-for-one stock split. 

Gains in Nvidia’s shares spilled over into its Asian suppliers. SK Hynix Inc (KS:000660), which is a key supplier of memory chips to the firm, rose 2.4%.

Samsung Electronics (LON:0593xq) Co Ltd (KS:005930), which is also set to begin supplying high-bandwith memory chips to Nvidia, rose 0.9%.

In Taiwan, contract chipmaker TSMC (TW:2330) (NYSE:TSM), which is by far Nvidia’s largest supplier, rose 1.4%, while contract electronics maker Hon Hai Precision Industry Co Ltd (TW:2317), also known as Foxconn (SS:601138), added 1.6%. 

In Japan, semiconductor testing equipment maker Advantest Corp. (TYO:6857), which is heavily exposed to Nvidia, added 3.5%.

Technology conglomerate SoftBank Group Corp. (TYO:9984) rose more than 3%, tracking aftermarket gains in its chip designing unit Arm Holdings (NASDAQ:ARM), which is also exposed to Nvidia. 

Nvidia’s strong earnings signaled that AI-driven demand for chips remained strong, and was likely to remain robust in the coming months as the industry grows. 

The rush into generative AI, which was triggered by the release of OpenAI’s ChatGPT in late-November, has been a key driver of demand for the chip industry, which was otherwise grappling with a pronounced slowdown in technology investment.

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