European chipmakers surge after Nvidia delivers forecast beat

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European chipmakers surge after Nvidia delivers forecast beat
Credit: © Reuters. -- Shares in European chipmakers jumped on Thursday after U.S. semiconductor giant Nvidia (NASDAQ: NVDA ) unveiled a stronger-than-anticipated second-quarter revenue forecast thanks to an artificial intelligence-fueled uptick in demand.

ASM International NV (AS: ASMI ) and ASML Holdings (AS: ASML ) in the Netherlands, as well as Germany's Siltronic AG (ETR: WAFGn ), all climbed close to the top of the pan-European Stoxx 600 in mid-day trading.

The moves reflected an almost 25% surge in Nvidia's stock in premarket U.S. dealmaking. The world's most valuable chipmaker guided for revenue in the current quarter in a range of $11.00 billion, plus or minus 2%, crushing Wall Street expectations for $7.13B.

The firm is experiencing a massive boost to chip demand from growing interest in AI. Chief Financial Officer Colette Kress said on an earnings call that demand for high-end chips "has extended our data center visibility out a few quarters, and we have procured substantially higher supply for the second half of the year."

Revenue at its data center business in the three months ended on April 30 reached a record $4.28B, up 14% from a year ago and 18% from the previous quarter. That helped offset weakness in its gaming business, where revenue fell by 38% year-on-year to $2.24B, but was still better than analysts' projections.

Earnings per share of $1.09 on revenue of $7.19B subsequently topped projections for income per share of $0.92 and sales of $6.52B.

In Asia, optimism over Nvidia's results carried into some of its suppliers, as well as other chipmakers in the region. Japan’s Advantest Corp. (TYO: 6857 ), which supplies semiconductor testing technology to Nvidia, was among the best performers for the day, rallying 16% to a fresh high. South Korea’s SK Hynix Inc (KS: 000660 ) also gained nearly 5%.

Japanese semiconductor players Nippon Electric Glass Co., Ltd. (TYO: 5214 ) and SUMCO Corp. (TYO: 3436 ) rose nearly 4% each, in turn helping the benchmark Nikkei 225 rise back towards 33-year highs hit earlier in the week.

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