Nvidia is 'jet fuel' for the stock market, say Wall Street analysts

• Nvidia posted stellar numbers after Wednesday's closing bell.
• The stock surged 14% in premarket trading, putting it on course to boost its value by $240 billion.

Nvidia reignited the tech rally after posting stellar earnings that proved why it's become an AI darling over the past 14 months.

The chipmaker's earnings-per-share and revenues for the final quarter of 2023 smashed Wall Street's expectations, while CEO Jensen Huang flexed his muscles after those figures were published by sharing a bullish forecast for the company's future.

Nvidia shares popped about 14% in premarket trading. If those gains hold up after the opening bell, Nvidia's total valuation will balloon by $240 billion to just under $2 trillion, by Business Insider's calculations.

Stock futures also surged ahead of the opening bell. The benchmark S&P 500 was on pace to climb 1% and the tech-heavy Nasdaq 100 looked set to start the day's trading 2% higher. Meanwhile, Japan's flagship Nikkei 225 index hit a record high for the first time in 34 years.

Here's how analysts are reacting to Nvidia's latest report.

Kathleen Brooks, XTB

Nvidia's earnings "led to a collective relief rally across markets, so we've seen record highs in Europe and also a record high in the Nikkei," Brooks told BI. "I don't think that would have happened if Nvidia's results hadn't been so good."

"It was classic stuff — it was another monster earnings report. And it wasn't just about the earnings, although they were very strong — it was more about the commentary that went with it. I have rarely heard a CEO be so bullish, so committed to this theme, and so convinced that this is the future."

Dan Ives, Wedbush

"In the biggest moment for the market and tech sector in many years, the godfather of AI Jensen and Nvidia just delivered a robust quarter and guidance, crushing Street and whisper expectations," Ives said in a research note on Wednesday night.

"This was a 'game-changing moment' for the tech bulls and puts jet fuel in the tech bull market thesis," he added.

Jason Hollands, Bestinvest

"The astronomical assent of Nvidia is truly a wonder to behold," Hollands said Thursday. "Four years ago, Nvidia was valued at less than $100 billion, now it is a $1.7 trillion company, making it the fourth-largest business on the planet measured by market capitalisation."

"The latest bullishness about Nvidia will give further legs to the 'Magnificent Seven' phenomena," he added, referring to the mega-cap Big Tech stocks that have racked up huge gains since the start of 2023.

Russ Mould, AJ Bell

"Crisis has been averted after Nvidia smashed expectations with its latest results," Mould wrote in a note Thursday. "Markets were braced for potential disappointment given how its shares were weak in the run-up to the numbers, but a large beat on both earnings and sales has put a new rocket under the stock."

"The people who made the most money in the gold rush of the mid-1800s were the ones providing the tools to get the job done, not those hunting for the precious metal," he added.

"Nvidia is effectively playing the same role today in this tech revolution. It is at the heart of a major structural change in how we use computers, so it is no wonder investors want a slice of the pie."