Technology Stocks Rise in Asia

Singapore - On Wednesday, chip maker Nvidia's statements alleviated concerns about an artificial intelligence bubble, causing technology stocks in Asia to rise. Nvidia positively influenced the markets with expectations of a better-than-expected fourth-quarter performance.

Nvidia surprised Wall Street by recording growth after several quarters of declining sales, resulting in a 5% increase in its stock value after hours. This development provided significant support to Asian markets, with Taiwan-based TSMC's shares rising 3.6%.

South Korean SK Hynix increased by more than 4%, while Samsung Electronics gained 4.5%. These developments raised the technology-heavy Taiwan and South Korea stock indices by more than 2%. In Japan, the Nikkei rose by more than 3%, reclaiming the 50,000 level.

Advantest saw its share value increase by 9%, while SoftBank Group and Tokyo Electron gained 4% and 5%, respectively. Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, stated, "Market psychology has been negative this month; investors were worried that the AI infrastructure was a bubble. However, major tech companies are extremely profitable and investing billions of dollars into data centers, servers, and chips."

Nvidia announced that it expects fourth-quarter sales to be $65 billion, which is higher than the average analyst estimate of $61.66 billion. Market sentiment before the company's earnings was weak; there had been a sharp sell-off recently due to high valuation concerns and the large amounts companies were spending on artificial intelligence. The exit of some prominent investors from tech investments also contributed to this unease.

Cloud giants like Microsoft and Amazon are investing billions in AI data centers, while some investors have argued that these companies artificially boost their profits by extending the depreciation periods of artificial intelligence hardware, such as Nvidia chips.