Japan’s key stock index soared to a new high, eclipsing a peak last reached 35 years ago, driven by better-than-expected earnings from tech behemoth Nvidia, which ignited a frenzy for AI-related stocks.
Nvidia, a leading US semiconductor company, announced its quarterly earnings after the close of Wall Street on Wednesday. The results exceeded expectations, with the firm reporting a staggering quarterly profit of $12.3 billion (£9.7 billion) on record revenues, propelled by the high demand for its AI-focused chips.
Despite a mixed performance on Wall Street, Nvidia disclosed an impressive quarterly revenue of $22.1 billion for the period ending in January and an annual revenue of $60.9 billion.
Analysts had anticipated that these robust profits might boost Asian markets, and the Japanese blue-chip index, the Nikkei 225, responded emphatically. It surged by 2.2 percent, closing at 39,098.68, shattering a record set in 1989 before Japan’s economic bubble burst.
Following that historic peak, Japanese stocks languished well below record levels for many years, particularly after the 2011 calamity involving a major earthquake, tsunamis, and the Fukushima Dai-Ichi nuclear disaster, which saw the market plunge below 8,200.
Commenting on the market trend, Kim Forrest, the chief investment officer at Bokeh Capital Partners, remarked to Bloomberg, “As goes Nvidia, so goes the market.” Forrest further noted that Nvidia’s earnings report reinforces the belief that AI will continue to be a robust sector for the foreseeable future.
