Aug 27 (Reuters) - The tech-heavy Nasdaq outperformed peers on Thursday after Nvidia's blockbuster results reaffirmed the strength of the AI boom and fueled gains in technology stocks.
Nvidia (NVDA.O), shares jumped 7.3% after the chip giant's robust forecast illustrated relentless demand for AI computing, even as it warned that shortages of memory components could curb the pace of the industry's growth.
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The report met lofty investor expectations and bolstered the view that the tech rally still has room to run, with companies at the heart of AI buildout continuing to deliver impressive growth.
"The market rewarded the demand outlook. Nvidia has made quarterly beats routine," said Matthew Tuttle, CEO of Tuttle Capital Management.
But "a company can beat the quarter, raise the outlook, and still leave investors asking harder questions than the ones it just answered," he said.
Salesforce (CRM.N), surged 14.4% after raising annual revenue and profit forecasts, and rolling out a new plug-in integrated with Anthropic's Claude AI models.
CrowdStrike (CRWD.O), climbed 14.5% after the cybersecurity software provider raised its annual revenue forecast and topped second-quarter earnings estimate.
Both these reports calmed worries that advanced AI tools could upend the traditional software industry, boosting investor appetite for beaten-down software stocks and narrowing the gap with semiconductors, which are seen as the primary beneficiaries of the AI boom.
U.S. chipmakers Micron Technology (MU.O), and Marvell Technology (MRVL.O), advanced about 1% each.
Other software firms also gained. ServiceNow added 5% and Palo Alto Networks (PANW.O), gained 8.5%.
At 09:42 a.m. ET, the Dow Jones Industrial Average (.DJI), rose 35.72 points, or 0.08%, to 53,499.60. The S&P 500 (.SPX), gained 26.74 points, or 0.35%, to 7,702.44, while the Nasdaq Composite (.IXIC), added 217.12 points, or 0.83%, to 26,342.87.
Moderna (MRNA.O), slipped 4.6% after unveiling a $2 billion convertible bonds sale, while HP (HPQ.N), slumped 9% after its PC unit shipments and margins declined in the third quarter.
Discount retailer Dollar General (DG.N), fell 3.3% after it maintained its annual sales forecast.
FOCUS SHIFTS BACK TO MACRO
With Nvidia results out, investor attention turns to Federal Reserve Chair Kevin Warsh's first Jackson Hole address on Friday for hints on the central bank's stance on the latest inflation data and the U.S. Treasury's efforts to tame yields.
"Investors want Warsh to define the key thresholds and datasets that would move him and the committee off a (rate) hold," said Anthony Saglimbene, chief market strategist at Ameriprise Financial.
"Notably, investors want more clarification on whether he's still drawing a hard line on the 2% inflation target."
The Personal Consumption Expenditures data came in slightly hotter than expected on Wednesday, complicating the policy outlook after a benign consumer inflation report earlier this month.
Kansas City Fed President Jeffrey Schmid, in an interview to CNBC, said current interest rates were not restrictive and that he favors hikes to bring inflation closer to the Fed's target.
Meanwhile, the new number of Americans filing for unemployment benefits fell to 203,000 in the week ended August 22, below 208,000 expected by economists polled by Reuters, data showed on Thursday.
Declining issues outnumbered advancers by a 1.31-to-1 ratio on the NYSE, while advancing issues outnumbered decliners by a 1.32-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and four new lows. The Nasdaq Composite recorded 23 new highs and 31 new lows.
Reporting by Purvi Agarwal, Niket Nishant and Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar
