LONDON — European markets were higher at the opening bell on Thursday as investors react to strong earnings by artificial intelligence darling Nvidia.
The pan-European Stoxx 600 rose 1% in the first few minutes of trade.
A graph of the pan-European Stoxx 600 Index
Nvidia posted third-quarter results after the bell on Wednesday, topping forecasts for revenue and its fourth-quarter sales guidance. The chipmaker saw revenue jump 62% to $57.01 billion year-on-year and said it expects revenue of $65 billion in the fourth quarter.
“There’s been a lot of talk about an AI bubble,” Nvidia CEO Jensen Huang told investors on an earnings call. “From our vantage point, we see something very different.”
In Asia, chip stocks rallied in early trading Thursday, with Samsung Electronics and Hon Hai Precision Industry, also known as Foxconn, climbing the region’s indexes.
Stock futures Stateside were also higher Wednesday night, as Nvidia’s results gave a boost to the broader market.
Ben Barringer, global head of technology research and investment strategist at Quilter Cheviot, told CNBC’s “Europe Early Edition” that Nvidia had brought relief in two-parts: it beat gross margins, which is important for semiconductor stocks, but the firm also addressed market concerns head-on in its earnings call.
“They really went through and sort of tried to disprove pretty much all of the bear cases out there. They talked about scaling laws, they talked about all the different elements of demand, not just hyperscaler capex, but the model demand that they’re seeing from companies like OpenAI and Anthropic, software demand, enterprise demand, sovereign AI,” Barringer said
Elsewhere, investors will be keeping an eye on defense-linked stocks after Europe’s Aerospace and Defense Index hit a two-month low on Wednesday and ended the day around 1.9% lower. The moves come as senior U.S. officials from the Pentagon arrived in Ukraine to work on a peace plan late on Wednesday.
With earnings season cooling, it’s a quieter day for Europe. Investors may be watching Walmart, however, which is expected to post results before markets open in the U.S.
Europe’s data organization Eurostat is set to release GDP and employment breakdowns by industry for 2024.
Data showed on Wednesday that the U.K.’s annual inflation rate retreated to 3.6% in October, raising the chances of a December rate cut from the Bank of England. It comes a week before the government’s high stakes Autumn Budget. Sterling was little changed against the U.S. dollar overnight.