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Investing.com-- Shares of Nvidia’s Asian suppliers rose on Thursday after the artificial intelligence major clocked strong first-quarter earnings and flagged a limited impact from stricter U.S. curbs on sales to China.
Chipmakers and chip-related stocks were the top performers, extending gains from the prior session as investors positioned for a strong print from NVIDIA Corporation (NASDAQ:NVDA).
South Korea’s Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660) rose 0.7% and 1.8%, respectively. Both companies supply memory chips to Nvidia.
Taiwan’s TSMC (TW:2330), which is among Nvidia’s biggest suppliers, rose 0.5%, while Hon Hai Precision Industry Co Ltd (TW:2317), which assembles Nvidia’s chipsets, jumped 3.6%.
In Japan, chip testing equipment maker Advantest Corp. (TYO:6857), which is an Nvidia supplier, surged 4.5%.
Nvidia clocked better-than-expected earnings in the first quarter, at $0.96 per share against expectations of $0.93. Revenue rose to $44.06 billion, clearing estimates of $43.31 billion.
A bulk of the company’s earnings came from its data center unit, which is at the heart of Nvidia’s AI development. Gaming revenue also rose after Nvidia launched a new line of processors during the quarter.
Still, the company flagged a $8 billion hit to second quarter sales from increased U.S. restrictions on chip sales to China. But investors appeared to have largely looked past this forecast, with Nvidia’s shares rising as much as 5% in U.S. aftermarket trade.
Nvidia CEO Jensen Huang said AI-fueled chip demand remained strong, and that the company was positioned to continue benefiting from this trend in the coming quarters.
Such a scenario bodes well for Nvidia’s suppliers, who have largely tracked a stellar valuation spike in the chipmaker over the past two years, as AI development picked up.
Broader Asian tech and chip stocks also rose on Thursday, as Nvidia’s earnings sparked bets that AI demand will continue to buoy tech investment in the coming quarters.