Shares of Nvidia (NVDA) rose more than 10% on Wednesday after better-than-expected guidance from rival AMD (AMD) and a bullish call from analysts at Morgan Stanley after shares fell more than 20%.
AMD’s quarterly results released late Tuesday put to rest some concerns that the AI business may have run its course as investors have been moving out of Big Tech over the past month as the company lowers expectations in the top and bottom line and posted a better-than-expected third-place outlook. quarter.
“The fear that some of this momentum won’t last, or maybe that the revenue trajectory won’t happen over the next 12 months — I think that’s starting to wane,” CFRA senior equity analyst Angelo Zino told Yahoo Finance on Wednesday. .
AMD shares rose as much as 6% in early trading.
Chip peers such as Broadcom (AVGO), Micron (MU), Taiwan Semiconductor (TSM), ASML (ASML) and Super Micro (SMCI) also rallied on Wednesday.
Nvidia stock also got a boost Wednesday from a comment from Morgan Stanley analysts led by Joseph Moore, who moved the stock to a Top Pick after a recent pullback from June’s record highs.
The company wrote that the roughly 25% selloff in Nvidia stock is “a good starting point as we continue to hear strong data points in both the short and long term, with exaggerated competitive concerns.”
Morgan Stanley cited five key drivers of Nvidia’s recent decline – spending plans, competition, export controls, supply chain fears and valuation concerns – but said: “These concerns are likely to keep the earnings environment strong, for Nvidia and across AI -complex.”
The company maintained its Overweight rating of $144 on the stock.
Nvidia stock is still up more than 130% this year, surpassing the Nasdaq’s more modest 17% gain. The company will release its next quarterly report on Wednesday, August 28.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X @ines_ferre.
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