Why Are Nvidia, Broadcom And Other Chip Stocks Soaring On Thursday?
Nvidia Corp (NASDAQ:NVDA), Broadcom Inc (NASDAQ:AVGO), Taiwan Semiconductor Manufacturing Co (NYSE:TSM), Advanced Micro Devices, Inc (NASDAQ:AMD), Arm Holdings (NASDAQ:ARM), Micron Technology, Inc (NASDAQ:MU), and Marvell Technology, Inc (NASDAQ:MRVL) stocks surged on Thursday in solidarity with Meta Platforms, Inc (NASDAQ:META) and Microsoft Corp (NASDAQ:MSFT) quarterly financial results.
Meta reported its first-quarter financial results after the market closed on Wednesday. Its revenue was $42.31 billion, up 16%, beating analyst estimates of $41.39 billion.
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The company reported first-quarter earnings of $6.43 per share, topping analyst estimates of $5.21 per share. Meta expects second-quarter revenue of $42.5 billion—$45.5 billion versus estimates of $44.06 billion.
Microsoft also reported third-quarter financial results after the market closed Wednesday. It reported a third-quarter revenue of $70.07 billion, up 13%. The revenue total beat a Street consensus estimate of $68.43 billion. The company reported quarterly earnings per share of $3.46, beating a Street consensus estimate of $3.22.
The upward stock trajectory of Nvidia and Broadcom, which are major suppliers of Meta and Microsoft, bears testimony to the interconnectivity of the semiconductor ecosystem.
The semiconductor stocks saw aggressive selloffs triggered by U.S. semiconductor sanctions, Donald Trump’s tariff policies with trading partners like China and other countries, and his hints toward revocation of the CHIPS Act launched by the Biden administration.
The emergence of competitive and affordable AI models from Chinese AI startup DeepSeek and e-commerce giant Alibaba Group Holding (NYSE:BABA) posed additional headwinds for the sector.
BofA Securities analyst Vivek Arya likes both GPU vendor Nvidia and ASIC vendors Broadcom Marvell Technology on the rising tide of AI compute/networking demand but does not yet see any evidence of GPUs losing their 80%+ share and ASICs taking more than a 10%-15% share of the overall accelerator market.
Price Action: NVDA stock is up 4.22%, AVGO is up 2.97%, and AMD up 1.72%.
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