Nasdaq Surges 2% Ahead of Nvidia Earnings: Why Bargain Hunters are Flocking to AI Stocks?

The Nasdaq index has broken through the 25,913-point mark, recording a powerful rally of over 2% from the previous session. In particular, ahead of Nvidia's highly anticipated earnings announcement, massive bargain hunting in leading AI semiconductor stocks drove a simultaneous rise across the broader tech sector.

3 Reasons Why Bargain Hunters are Flocking to AI Semiconductor Stocks

The recent resurgence of AI-related stocks amidst high market volatility is driven by the following key factors:

• Expectations for Nvidia's Strong Earnings: Due to the global expansion of data centers and the proliferation of generative AI technology, the demand for Nvidia's high-performance GPUs and AI accelerators is expected to remain explosive.
• Valuation Appeal Following Excessive Drops: As the semiconductor sector underwent a short-term correction due to recent profitability concerns, analyses from institutional investors indicating that key companies had entered an undervalued territory stimulated buying interest.
• Big Tech's Unstoppable AI Infrastructure Investment: Major big tech companies like Microsoft and Google reaffirmed their commitment to not scale back AI investments, easing market anxieties.

The Key Variable Deciding Nasdaq's Future Direction

Experts unanimously agree that the sustainability of this rally depends on the forward guidance Nvidia provides. If it goes beyond a simple earnings surprise and presents solid growth indicators through next year, the virtuous cycle of 'AI infrastructure investment expansion → earnings confirmation → market rally' will be further solidified. Conversely, if expectations are not met, the possibility of profit-taking sell-offs cannot be ruled out.

Frequently Asked Questions (FAQ)

Q. Is it safe to buy AI semiconductor stocks right now?

While the short-term rebound momentum is strong, volatility could become extreme immediately after the actual earnings release. Therefore, rather than putting all your money into a single stock, a conservative approach of buying in installments after confirming the earnings is recommended.

Q. Besides Nvidia, what other AI-related stocks should I pay attention to?

Along with High Bandwidth Memory (HBM) equipment stocks essential for Nvidia's GPU chips, power and cooling infrastructure stocks that improve the efficiency of power-hungry data centers are drawing attention as the next generation of beneficiaries.