[New York Stock Market] Nasdaq Rises 1% on Nvidia Earnings Hopes and Easing AI Fears

All Top 10 Mega-Cap Stocks Rise
Nvidia Up 1.47%... Microsoft Jumps 2.61%

As fears that artificial intelligence (AI) will devour the entire economy, including the software sector, have faded, all three major U.S. stock indexes in New York started higher on the 25th (local time) ahead of Nvidia's earnings announcement.

As of 10:26 a.m. that day on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was up 79.14 points (+0.16%) from the previous session at 49,253.64. The large-cap S&P 500 Index was up 34.06 points (+0.49%) at 6,924.13, and the tech-heavy Nasdaq Composite was up 228.90 points (+1.00%) at 23,092.58.

The top 10 companies by market capitalization are all rising, pulling the indexes higher. Nvidia, which is set to report earnings later in the day, is up 1.47% from the previous day at 195.69 dollars. Apple is up 0.43%, Microsoft (MS) 2.61%, Amazon.com 0.83%, TSMC 0.08%, Alphabet 0.31%, Broadcom 2.02%, Tesla 1.15%, and Meta 1.65%, all trading higher.

The market is focused on Nvidia's earnings, which will be released after the close. Recently, as fears over AI intensified, software stocks weakened; however, share prices have rebounded as expectations have grown that AI will play a complementary role across industries rather than completely displacing them.

Within Nvidia's earnings, the market's attention is concentrated on its "data center" revenue. Nvidia's data center revenue is expected to reach 61 billion dollars, up 70% from the same period a year earlier. This is about 17 times higher than the 3.6 billion dollars in data center revenue Nvidia recorded in the fourth quarter of 2023, when OpenAI launched ChatGPT.

The forecast for earnings per share (EPS) is 1.53 dollars, up 72% year-on-year, and the expected gross margin is 75%. If the gross margin falls short of expectations, concerns over intensifying competition could grow.

In a report, Matt Maley, chief market strategist at Miller Tabak + Co., said, "Nvidia's earnings announcement and forward guidance tonight will determine the next major move in the stock market," adding, "Nvidia is still the single most important stock within the most important leadership group in the equity market."

Netflix is also surging, up 4.8%. Warner Bros. Discovery said that Paramount-Skydance's 31 dollars-per-share acquisition proposal could lead to better terms than its existing contract with Netflix.