Shares of Nvidia’s Asian suppliers rose on Wednesday, as investors positioned for strong first-quarter earnings from the artificial intelligence major, which also acts as a bellwether for the tech industry.
Chipmakers and chip-adjacent stocks were the top gainers, with South Korea’s Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660)- who supply Nvidia (NASDAQ:NVDA) with memory chips- up 3.2% and 2.8%, respectively.
Japanese semiconductor testing equipment maker Advantest Corp. (TYO:6857) added 1.4%, while Taiwan’s TSMC (TW:2330) (NYSE:TSM) rose 0.5%. Hon Hai Precision Industry Co Ltd (TW:2317) (Foxconn), which assembles Nvidia’s chipsets, moved in a flat-to-low range.
Gains in Nvidia’s suppliers tracked an over 3% jump in the firm’s shares on Tuesday, as it and broader tech stocks courted increased bids on improving risk appetite.
Nvidia is forecast to log earnings per share of $0.893 on revenue of $43.12 billion for the three months to April 31, both up substantially from last year, Investing.com data showed.
The company is expected to have benefited greatly from sustained demand as Wall Street’s so-called AI hyperscalers continued to pour billions into data centers and cloud infrastructure.
Focus will be squarely on Nvidia’s outlook, especially as the company grapples with stricter U.S. controls on sales to China. A shift towards AI inference from training, which is less data intensive, as well as increased interest in less demanding AI models, also stand to dampen future chip demand.
Nvidia’s shares have tended to underperform after the company’s earnings over the past three quarters, with its revenue or outlook usually missing some lofty expectations. This underperformance has also spilled over into shares of Nvidia’s suppliers in the past, with markets usually volatile in the run-up and aftermath of Nvidia’s earnings.
Broader Asian tech stocks advanced on Wednesday, tracking overnight gains in their U.S. peers as markets awaited Nvidia’s earnings. Easing U.S. Treasury yields, after a sharp run-up in recent weeks, also aided tech.
