Nvidia fever is back as AI chip stocks fuel optimistic start to Big Tech’s Q3 2024 earnings season

Shares of Nvidia Corporation are once again flirting with all-times highs as investors show fresh optimism for AI-focused stocks at the start of Big Tech’s third-quarter earnings season, which begins in earnest this week.

The market-leading chip designer (Nasdaq: NVDIA) saw its stock rise more than 3% in premarket trading on Thursday. If it opens at that price, it will be close to its 52-week high of $140.76 a share.

Nvidia’s rise is likely being fueled by a strong earnings report from Taiwan Semiconductor Manufacturing Company (NYSE: TSM). As CNBC reported, the semiconductor giant saw its net profit increase 54% in the third quarter, indicating continued strong demand for the underlying infrastructure and devices that are powering the artificial intelligence boom.

U.S.-listed shares of TSM were up more than 9% in premarket as of the time of this writing. The company also raised its growth outlook, as Reuters reported.

Other AI-adjacent players were likewise seeing a boost on Thursday, such as server company Super Micro Computer (NASDAQ: SMCI), whose stock was up more than 3% in premarket trading. Advanced Micro Devices (NASDAQ: AMD) was up about 2.6%.

Big Tech on deck

Nvidia has been the most closely watched stock of the last two years as tech companies that rely on its chips continue to pour resources into AI.

Although there is much speculation over whether this boom will ultimately pay off in terms of profits for tech companies, the need for more and more computing power appears to know no bounds. Just yesterday, e-commerce giant Amazon announced three separate agreements for nuclear energy projects to help meet its power needs.

Of course, there’s no guarantee that investor optimism will continue as other Big Tech companies report their earnings over the next few weeks, particularly with November’s presidential election throwing a dose of unpredictability—and probably even chaos—into the mix.

First on deck is Netflix, which reports earnings after the closing bell on Thursday. As Barron’s points out, expectations are high, but investors could be turned off if the streaming giant reports weak subscriber growth or disappointing news about its all-important advertising ambitions. Shares of Netflix (NASDAQ: NFLX) have been trending downward over the last few days.

As for the rest of earnings season, we’ll just have to wait and see.