Global stock markets experienced a significant rebound of £200 billion on Thursday following reassuring statements from the CEO of the world’s largest company dismissing concerns of an artificial intelligence (AI) bubble.
Nvidia, a prominent US corporation specializing in AI technology, reported a remarkable 62% increase in sales to £43.6 billion for the three months ending in October. Jensen Huang, the company’s chief executive, expressed confidence in their outlook amidst discussions about an AI bubble.
The positive results from Nvidia led to a surge in global stock markets, with the FTSE All World Index, representing major stock exchanges worldwide, climbing by 0.3%. In the UK, the FTSE 100 saw a nearly 70-point increase during mid-morning trading, although it still lags behind recent highs.
Recent weeks had seen a decline in technology company valuations amid worries of an inflated market perception. Concerns over a potential bubble and its adverse effects on investors and pension funds have been prevalent.
Nvidia’s strong performance also benefitted its competitors like Google’s parent company Alphabet and Microsoft, showcasing a positive ripple effect in the market sentiment.
While some analysts remain cautious about the sustainability of AI infrastructure spending growth, others view Nvidia’s results as a calming influence on the market. The company’s success has eased concerns and provided a boost to investor confidence, despite lingering fears of a possible AI bubble.
The robust demand highlighted by Nvidia’s earnings has instilled optimism among investors, reflecting a renewed sense of positivity in the market. The company’s financial performance has been pivotal in restoring stability to the markets after a period of uncertainty.
