Nvidia’s surge to a record intraday high on Thursday provided a temporary boost to the S&P 500, sparking curiosity among investors about the future of the artificial intelligence (AI) market. During the session, Nvidia’s shares increased by as much as 3.8%, with prices occasionally exceeding $140. This represented the first new intraday peak for the prominent technology company since June. The increase appeared to be fueled by positive sentiment around Taiwan Semiconductor, which saw its stock rise nearly 10% after surpassing Wall Street’s third-quarter earnings expectations. The S&P 500 also reached a record high during the day, largely propelled by robust semiconductor and financial stocks.
Earlier in the week, Nvidia’s stock hit a historic closing high on Monday and has accumulated a 1.6% increase to date. This recent uptick in the company’s performance underscores a reemergence of optimistic sentiment following earlier concerns that AI stocks had escalated too rapidly. Nvidia’s shares experienced declines in April and July, as investors questioned whether the AI industry’s growth was overly hyped, according to Tom Martin of Globalt Investments. He noted that there was a sentiment among some that growth could not continue indefinitely, prompting a more cautious approach.
Martin, a senior portfolio manager at Globalt Investments, expressed optimism about the AI sector’s prospects, particularly as the year’s end—a typically strong period for the market—approaches. He identified fundamental catalysts that could drive Nvidia’s share price higher due to the ongoing demand for its products. However, Martin cautioned that investors might encounter volatility, as perceptions of overvaluation could lead to profit-taking strategies, followed by attempts to repurchase stocks at lower prices, contributing to fluctuations. More broadly, he suggested that AI spending could sustain global economic momentum, even as other areas, such as China and automobile sales, exhibit signs of slowing. Martin expressed a preference for holding Nvidia stock in their portfolio, acknowledging the potential for turbulence but believing in the company’s overall value trajectory.
