Nvidia triggers rally in semiconductor stocks; ASM Tech locked at 10% upper circuit, SPEL hits 52-week high

Nvidia shares were locked at 16 per cent upper circuit to hit a lifetime high of $785.38 after the bellwether for artificial intelligence (AI) chip demand once again exceeded Wall Street's sky-high expectations, re-igniting a global rally in tech stocks. The sharp rally in Nvidia shares triggered a rally in semiconductor-related stocks in India such as ASM Technologies and SPEL Semiconductors.

The AI chipmaker returned as the third most valuable US company on February 22 adding a record $277 billion to its market capitalisation and bringing its total market value near $2 trillion. Nvidia's market value growth eclipsed the $197-billion gain made by Facebook-parent Meta at the start of the month, and made Wall Street’s largest single-day gain in history at $1.96 trillion. 

Also Read: Nvidia hits 15% upper circuit as AI mania sparks tech rally on Wall Street, market value nears $2 trillion

Semiconductor stocks in India

Shares of SPEL Semiconductors were locked at five per cent upper circuit to hit a fresh 52-week high mark of ₹119.75 apiece on the BSE, against a previous close of ₹114.05 on the BSE. Shares settled five per cent higher at ₹119.75 apiece on the BSE. 

Similarly, shares of ASM Technologies opened at 850.40 and gained 8.9 per cent to hit an intra day high of ₹926.5, against a 52-week high of ₹931.50 apiece on the BSE. Shares settled 10 per cent higher at ₹926.55 apiece on the BSE.

Nvidia quarterly results

Nvidia forecast a roughly three-fold surge in first-quarter revenue on strong demand for its AI chips. The chipmaker also gave guidance above expectations, driven by AI spending at its biggest customers, including Microsoft Corp. and Meta. The revenue in the current period will be about $24 billion, while analysts had predicted $21.9 billion on average, according to Bloomberg.

If Nvidia hits the $2 trillion mark, it would achieve the milestone at the fastest pace ever by adding $1 trillion in just about nine months. A series of estimate-beating results means the shares have been getting cheaper on a price-to-earnings basis.

“Accelerated computing and generative AI have hit the tipping point," Chief Executive Officer Jensen Huang said in the statement. Demand is surging worldwide across companies, industries and nations, according to Huang.

In the fiscal fourth quarter, which ended January 28, Nvidia’s revenue more than tripled to $22.1 billion. The profit excluding certain items was $5.16 a share. Analysts had predicted sales of about $20.4 billion and earnings of $4.60 per share.

Nvidia’s data center division, now by far its largest source of sales, generated $18.4 billion of revenue, up 409 per cent from the same period a year earlier. Gaming chips provided $2.87 billion of sales, according to Bloomberg.