Tech stocks lead Wall Street after Nvidia, Salesforce and others say AI is creating big growth

NEW YORK (AP) — Technology stocks led Wall Street on Thursday after Nvidia, Salesforce and others reported even fatter profits for the spring than analysts expected.

The S&P 500 rose 0.7% and pulled closer to its all-time high set earlier this month. The Dow Jones Industrial Average added 105 points, or 0.2%, and the Nasdaq composite climbed 1.6%.

Nvidia was the strongest force pulling the market higher, and the chip giant rallied 8.7% after once again delivering stronger profit and revenue for the latest quarter than analysts expected. More importantly for Wall Street, it also gave forecasts for upcoming revenue growth that topped analysts’ estimates, suggesting demand remains strong for chips to power artificial-intelligence projects.

“AI has reached its inflection point,” Nvidia CEO Jensen Huang said. “It’s doing useful work. Its tokens are productive and profitable.”

That helped calm some of the worries that have built around AI stocks generally, which have been under pressure recently. After rocketing higher for years because of the frenzy around AI, stocks in the industry are confronting skepticism that they shot too high and that booming demand for AI chips may fade if the AI revolution does not produce as much profit as promised.

Another big tech company, Salesforce, jumped 22.6% after it said that AI helped it deliver one of its best quarters in history. It reported stronger profit than analysts expected, and CEO Marc Benioff said it’s “seeing incredible demand for our AI and data products” and that it’s “turning AI into customer success at unprecedented scale.”

Salesforce, which helps companies manage their customers’ data, also raised its forecast for revenue over the full year and announced an expanded partnership to pair Anthropic’s Claude chatbot with its platform. It’s notable because Salesforce’s stock struggled earlier on worries that competitors powered by AI could ultimately steal away customers from Salesforce and other software companies. Salesforce’s stock had its best day in six years.

Elsewhere, though, trends were more mixed across big U.S. companies, and the majority of stocks within the S&P 500 fell.

HP sank 2.9% even though it topped analysts’ expectations for profit and revenue in the latest quarter. Analysts pointed to worries about its sales of personal computers, as well as how higher prices for computer memory and other commodities are pressuring its profit margins.

Best Buy and some other retailers sank amid continued worries that U.S. shoppers could be stretched because of high inflation and discouragement about the economy. Best Buy fell 4.4% even though it topped analysts’ expectations for both profit and revenue in the latest quarter.

One potential winner from high inflation could be dollar stores, which could see higher-income households become new customers as they look for less expensive places to shop.

Dollar General rose 2.5% after reporting a stronger profit for the latest quarter than analysts expected. But rival Dollar Tree sank 3.9% despite blowing past profit expectations. More attention may have been on its forecasted range for an important underlying measure of revenue, whose midpoint fell short of analysts’ expectations.

All told, the S&P 500 rose 55.29 points to 7,730.99. The Dow Jones Industrial Average added 105.56 to 53,569.44, and the Nasdaq composite rose 411.16 to 26,541.35.

In the bond market, Treasury yields ticked higher following a report suggesting the U.S. job market remains solid. Fewer U.S. workers applied for unemployment benefits last week, an indication that layoffs could be remaining low.

The yield on the 10-year Treasury rose to 4.67% from 4.66% late Wednesday.

Yields have been largely climbing through the summer on worries about high inflation, the U.S. government’s gargantuan and growing debt and other factors. They got so high that the U.S. Treasury Department made a surprise announcement last week to intervene in the bond market, though analysts say its effect could be limited.

The next big event for the bond market will be a speech coming Friday from the chairman of the Federal Reserve, Kevin Warsh. He has been adamant about giving financial markets fewer clues about what the Fed will do in the future with interest rates to control inflation. But the pressure is on him to give clearer guidance.

One wild card for inflation has been oil prices, which have been swinging with uncertainty about when the war with Iran will allow oil tankers to freely exit the Persian Gulf again. The price for a barrel of Brent crude, the international standard, rose 1.8% Thursday to $88.52.

In stock markets abroad, indexes were mixed in Europe and Asia. Stocks jumped 1.5% in Seoul and 1.1% in Shanghai but fell 1.7% in Paris.

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AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.