Asian Markets Surge After Nvidia Delivers Strong Earnings Report

Asian stock markets climbed Thursday following Nvidia's better-than-expected earnings, which eased investor concerns about artificial intelligence spending. The positive results helped drive Japan's Nikkei to a record high while South Korean markets gained 2%.

Stock markets across Asia posted solid gains Thursday after computer chip giant Nvidia delivered earnings results that exceeded Wall Street expectations, calming investor fears about massive corporate spending on artificial intelligence technology.

The strong financial performance from Nvidia helped ease worries that companies might be overspending on AI investments without seeing adequate returns. Japan’s Nikkei stock index reached an all-time high during early trading, while South Korea’s main stock index climbed 2 percent.

The broader Asia-Pacific stock index outside of Japan increased by 0.7 percent, reflecting widespread optimism among investors.

Nvidia projected first-quarter revenue figures that surpassed analyst predictions, banking on continued heavy investment from major technology companies in its AI processing chips.

“Nvidia’s print was strong enough to keep the AI capex cycle alive. The immediate market reaction is relief, translating into a modest risk-on tone after the AI-driven volatility of recent weeks,” said Saxo’s chief investment strategist Charu Chanana.

Investment professionals have shown mixed feelings about AI-related stocks recently, expressing concern about whether the technology will generate sufficient profits while also fearing they might miss out on potential gains.

“The debate has been much less about stellar near-term results and more about the sustainability of AI capex spending given concerns around its quantum, monetisation and cashflow degradation,” said Richard Clode, portfolio manager at Janus Henderson Investors.

Despite initial after-hours gains following the earnings announcement, Nvidia shares later gave up those increases, leaving U.S. stock futures slightly negative.

Meanwhile, Japan’s currency remained a key concern for traders as it stayed near two-week lows following the government’s nomination of two economics professors viewed as supporters of continued monetary stimulus to the central bank’s governing board.

This unexpected appointment was interpreted as reflecting Prime Minister preferences for maintaining loose monetary policy, raising questions about future interest rate increases by Japan’s central bank.

The yen recovered slightly Thursday, gaining 0.2 percent against the dollar to trade at 156.01, though it remains down approximately 0.6 percent for the week.

“Dovish-leaning BOJ nominees have reignited concerns the central bank may lag policy normalisation, weakening the JPY and steepening JGB curve,” strategists at OCBC noted.

Oil prices continued climbing amid ongoing concerns about potential supply disruptions from escalating tensions between the United States and Iran, with negotiations over Iran’s nuclear program scheduled for Thursday.

Brent crude futures increased 0.27 percent to $71.04 per barrel, while U.S. crude oil rose 0.24 percent to $65.55 per barrel.

Senior officials in the current administration emphasized Wednesday that Iran represents a significant threat ahead of Thursday’s diplomatic talks regarding Tehran’s nuclear activities.

Gold prices also moved higher, gaining 0.27 percent to $5,184.66 per ounce, as investors sought safe-haven assets amid geopolitical uncertainties.