The S&P 500's technology sector surged 3.4 percent Thursday, the only one of 11 GICS groups in the green, as blowout earnings from Nvidia, Salesforce, and CrowdStrike reignited the AI trade.
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S&P 500 tech sector surges 3.4% on Nvidia, Salesforce earnings
The S&P 500's technology sector surged 3.4 percent Thursday, the only one of 11 GICS groups in the green, as blowout earnings from Nvidia, Salesforce, and CrowdStrike reignited the AI trade.
S&P 500 rose 0.8 percent Thursday as its tech sector surged 3.4 percent, the only gainer among 11 GICS groups, after Nvidia's blowout earnings.
"The AI infrastructure buildout is at full steam," Jensen Huang, chief executive officer of Nvidia, said in prepared comments.
The Nasdaq Composite advanced 1.5 percent and the Dow Jones Industrial Average gained 0.4 percent. Salesforce jumped 22.58 percent, CrowdStrike surged 20.5 percent, and Synopsys climbed 13.39 percent to lead the tech sector, while Nvidia shares rose 9 percent after the company guided third-quarter revenue to $108 billion, ahead of the roughly $105 billion consensus. Western Digital and HP lagged, with HP falling 4.5 percent. Outside tech, consumer staples dropped 1.5 percent, healthcare fell 1.1 percent, and real estate declined 0.92 percent. Energy slipped 0.37 percent, while financials, materials, and telecoms each fell as much as 0.75 percent.
The divergence between tech and the rest of the market leaves the S&P 500's breadth thin — just one sector in the green — even as the index trades higher. Investors now turn to Federal Reserve Chair Kevin Warsh's speech at the Kansas City Fed's annual Jackson Hole conference Friday for clarity on the rate path.
Salesforce reported second-quarter revenue of $11.35 billion, narrowly beating the $11.33 billion consensus, while adjusted earnings per share of $5.90 doubled year-over-year and handily topped the $3.28 forecast. The enterprise software maker lifted its full-year sales forecast to $46.1 billion to $46.4 billion and announced an expanded deal with Anthropic to bring "Claudeforce" to its customers. JPMorgan analysts said the partnership could ease concerns about AI disruption.
CrowdStrike posted what CEO George Kurtz called "the best quarter in CrowdStrike's history," with revenue of $1.47 billion, up 26 percent year-over-year, and adjusted earnings of 31 cents per share. The cybersecurity firm raised its full-year revenue forecast to $5.99 billion to $6.01 billion. Oppenheimer analysts said the results showed cybersecurity is "in the early stages of a multi-year investment cycle" driven by AI developments.
Nvidia's Guidance Extends the AI Buildout Debate
Nvidia's third-quarter revenue guidance of $108 billion was ahead of the Street's consensus near $105 billion, and CFO Colette Kress suggested revenue could rise some 70 percent in the next fiscal year despite supply bottlenecks. "The debate shifted from whether AI spending is peaking to how much longer this buildout can continue," Jake Behan, head of capital markets at Direxion, said.
The 10-year Treasury yield rose two basis points to 4.67 percent, while the dollar index edged lower to 99.10. Gold futures gained 0.2 percent to $4,660 an ounce, and West Texas Intermediate crude rose 0.6 percent to $82.70 a barrel. Bitcoin traded above $80,000 for the second time this week.
This article is for informational purposes only and does not constitute investment advice.
