The Nvidia effect: How the market is reacting to the chip maker's blowout Q2 earnings

Nvidia’s second-quarter results jolted markets and eased fears around AI demand and supply constraints. After initially slipping as much as 2% on Thursday, Nvidia shares surged up to 8% as investors digested CEO Jensen Huang’s comments. The key driver was Nvidia’s forecast of 70% revenue growth for the coming fiscal year, paired with Huang’s note that growth is largely constrained by limited supply. Nvidia’s market cap is described as $5.4 trillion, and the stock was up 20% for the year after the session. US indices rose modestly after the opening bell, while the Philadelphia Semiconductor Index jumped 1%. Chip and memory peers rallied, including Broadcom (+3%) and ARM Holdings (+5%). Huang also linked future shipment volumes to High Bandwidth Memory availability, with memory stocks recovering after a sharp correction. VanEck’s Nick Frasse said the results function as a clear read on AI infrastructure capex into 2027, influencing compute, memory, foundry, packaging, and power.