Nvidia Corp. NVDA disclosed exceptional earnings and outlook bolstered by its expanding AI division, significantly surpassing market predictions.

The chipmaker's shares soared about 20% in the two sessions following the earnings announcement on Feb. 21, propelling Nvidia’s market capitalization beyond the $1.9 trillion mark.

This remarkable ascent in Nvidia's stock value propelled the broader stock market to unprecedented levels, with the S&P 500 index breaking the 5,100-point barrier and the Nasdaq 100 index surpassing the 18,000-point threshold.

Nvidia Rally Winners

Amid Nvidia’s record-breaking performance, particularly in AI, several stocks and ETFs were positioned to benefit. Notable mentions included C3.ai AI, Advanced Micro Devices Inc. AMD, and specific ETFs with exposure to Nvidia and related tech sectors.

AI Factories’ Future

Jensen Huang, CEO of Nvidia, predicted “AI factories” would revolutionize industries globally by transforming data into valuable outputs, like those generated by AI chatbots. Nvidia’s advancements, particularly in AI chips where it holds a 70% market share, position the company at the forefront of this industrial shift.

Fed’s Inflation Strategy

The Federal Reserve’s recent minutes revealed a cautious approach toward rate cuts, emphasizing vigilance against inflation. They expressed concerns over premature policy easing, highlighting commercial real estate vulnerabilities. The focus remained on achieving a sustainable 2% inflation target, with policy adjustments to be data-driven.

Sanctions Expansion Impact

The U.S. marked the second anniversary of Russia’s invasion of Ukraine by imposing sanctions on over 500 Russian entities. Targeting the military-industrial complex and third-country companies aiding Russia’s war efforts, this move was part of a broader strategy to apply economic pressure in response to the conflict and associated human rights violations.

Ackman’s Profitable Year

In 2023, Bill Ackman‘s Pershing Square realized $610 million, ranking seventh among top hedge fund managers. Focusing on just eight stocks, his fund achieved a 26.7% return, led by significant gains from Chipotle and other large-cap stocks.

Palo Alto’s Strategy Shift

Palo Alto Networks Inc. PANW was navigating a tricky phase due to a strategic pivot, resulting in uneven financials and reduced forecasts, raising concerns about future earnings. However, some analysts remained optimistic about its long-term growth and market position.

Musk Slams Lucid

Elon Musk expressed skepticism about the viability of electric vehicle manufacturers Lucid Group Inc. LCID and Rivian Automotive Inc. RIVN. Citing Lucid’s reliance on funding from Saudi Arabia’s Public Investment Fund and suggesting a potential bankruptcy for Rivian within six quarters, Musk pointed out the challenges of achieving volume production with positive cash flow in the EV sector.

Read Now: Retail Traders Are Extra Bullish: Charles Schwab Survey Shows 52% Eye Single Stock Purchases In Q1

Photo: Shutterstock