Asia tech stocks soar on strong Nvidia report

Tech stocks surged in Asia after strong financial reports from chipmaker Nvidia temporarily allayed investor fears of a bubble in the artificial intelligence market. Accelerating revenue growth at the AI market leader after several quarters of slowing sales and a positive outlook breathed new life into the tech sector's rally, giving a boost to Asian markets, Reuters wrote.

Shares of Taiwan's TSMC, the world's largest contract chipmaker and Nvidia's main supplier, jumped 4.7% in the moment. Shares of South Korea's SK Hynix, a major supplier of high-speed memory chips to Nvidia, rose 6.2%, while its rival Samsung Electronics added 6.6%. This led to stock indices in Taiwan and South Korea, where technology companies are heavily weighted, rising more than 3%.

In Japan, the benchmark Nikkei 225 index rose 4.2% in early Tokyo trading. The broader TOPIX index added 2.7%. Shares of Advantest, a maker of chip performance testing equipment, soared 12%. Shares of SoftBank Group, one of the leading investors in the AI sector, and Tokyo Electron, a chip equipment maker, posted peak intraday gains of 9.1% and 7.1%, respectively. Shares of Japanese exporting companies also received support from the weakening of the yen to 157 per dollar. Its rate went down after the publication in New York of the minutes of the October meeting of the U.S. Federal Reserve - the document showed that the dollar interest rate may not fall again this year, writes Nikkei Asia.

Nvidia has "delivered another master class in AI dominance," IG analyst Tony Sycamore said.

"We expect Nvidia's results to lead to higher earnings forecasts across the sector, including TSMC, SK Hynix and Samsung, as well as the broader Asian component and assembly supply chain," New Street Research equity analyst Rolf Balk told CNBC.

"Market psychology has been negative this month due to fears that the AI infrastructure boom is a bubble. Perhaps in a few years we'll look back on this time and point to signs that it was. But right now, the world's largest tech companies are extremely profitable, reinvesting billions of dollars in data centers, servers and chips, and that spending is real," stated Northlight Asset Management Chief Investment Officer Chris Zaccarelli.

This article was AI-translated and verified by a human editor