On July 31, NVIDIA and Tesla, leading stocks in the AI semiconductor and electric vehicle sectors, significantly boosted the New York stock market.
The tech-heavy Nasdaq surged by 435 points (2.5%), reaching 17,584. The Standard & Poor’s 500 climbed by 89 points (1.6%) to 5,525. Meanwhile, the Dow Jones Industrial Average rose by 250 points (0.6%), closing at 40,993.
Earnings announcements from Microsoft and AMD the previous day drove the rally in NVIDIA’s stock. Tesla’s stock also gained traction, supported by Morgan Stanley’s positive outlook on its semi-truck.
NVIDIA’s stock price surged by 11% during the afternoon session, recovering from a 7% drop the previous day. The stock jumped by $11.30 (10.89%) to $115.03.
The boost came after Microsoft and AMD released their quarterly earnings reports after the market closed, easing concerns about NVIDIA. Microsoft reported a 55% year-over-year increase in capital expenditures for the second quarter, totaling $13.9 billion, much of which was invested in data centers using NVIDIA semiconductors. This alleviated fears that Microsoft’s expansion into in-house AI semiconductor production might diminish demand for NVIDIA’s chips. Additionally, worries about significant competition from other tech giants like Amazon, Meta Platforms, and Alphabet have lessened.
AMD’s earnings announcement also contributed to NVIDIA’s rise. AMD increased its annual AI semiconductor sales forecast from $4 billion to $4.5 billion, reinforcing the growth trend in the AI semiconductor market and highlighting NVIDIA’s leading position in the industry.
Morgan Stanley analyst Joe Moore reinstated NVIDIA as the top stock of the day, recommending an overweight (buy) rating and setting a target price of $144. This positive outlook helped shift focus back to tech stocks, creating a favorable environment for Tesla.
Tesla’s stock rebounded, buoyed by Morgan Stanley’s optimistic forecast. Ravi Shanker, a Wall Street analyst working for Morgan Stanley, noted that Tesla’s semi-truck is poised to transform the commercial truck market. Shanker praised Tesla’s updates and factory photos, which clarified that production of the semi-truck is set to begin next year. He suggested that Tesla is set to lead the market for large electric trucks.
Previously, a Wall Street analyst for Morgan Stanley, Adam Jonas, had selected Tesla as a top stock and recommended a buy rating with a target price of $310.
