NVIDIA is leading the entire industry! AMD soared by 33%, bullish call options are hot, and AI, technology, and semiconductor ETFs are all rising across the board.

NVIDIA's impressive earnings report once again ignites the "faith" in AI, injecting a strong dose of confidence into the market.

Overnight, the leading chipmaker NVIDIA's financial report continued to exceed expectations, showcasing the market's fervent demand for AI. Boosted by this, the three major U.S. stock indexes all closed higher, with the Nasdaq rising by as much as 3% at one point. The S&P, Pro UltrPro Dow30 all hit new closing highs, and the tech-heavy NASDAQ-100 rose by 3%, setting a new record high at the close.

In terms of sectors, the chip and IT sectors led by NVIDIA and Microsoft surged by nearly 4.4%, outperforming other sectors. Non-essential consumer goods, communication services, and financial sectors also rose by over 1%.

According to FactSet data, the Dow Jones Industrial Average closed up by 1.2%, with software and computer service companies seeing the largest gains.

On the individual stock front, NVIDIA opened more than 10% higher, soared by 16.5% intraday, and closed up by 16.4%, hitting both intraday and closing historical highs, with a market value reaching $1.94 trillion.

After a four-day decline, chip stocks rebounded significantly, with the Philadelphia Semiconductor Index and the Semiconductor Industry ETF SOXX rising by nearly 5% and 4.9% respectively, both hitting historical highs. AMD surged by 10.7% at the close, Arm rose by over 10% at one point, closed up by 4.2%, Broadcom rose by 6.3%, and Intel opened high but closed down by 1.1%.

The tech giants, known as the "Seven Sisters," all rose during the trading day, with Amazon up by nearly 3.6%, Microsoft rebounding by almost 2.4%, and Apple and Google both rising by over 1%.

Of note, as a partner of NVIDIA, the "demon stock" in AI, Super Micro Computer, saw its stock price soar by 32.87% overnight, marking the "second largest increase in history," far surpassing the gains of NVIDIA and other AI concept stocks.

As previously mentioned by Wall Street News, thanks to the strong demand in the market for its servers (the infrastructure of AI chips) especially its liquid cooling systems, Super Micro Computer has surged by more than 9 times over the past year.

Solita Marcelli, Chief Investment Officer for the Americas at UBS Global Wealth Management, stated in a report on Thursday:

"We believe the recent momentum in AI-related stocks may continue."In terms of positioning, we maintain a preference for semiconductors and software, and believe that there are opportunities for beneficiaries in artificial intelligence edge computing, large technology, and their partners.

Related ETFs surged across the board

ETFs related to AI concept stocks also collectively surged overnight.

According to FactSet data, the Global X Robotics & Artificial Intelligence ETF, which manages assets of $3 billion, closed up 4.4%. According to the holdings data on the Global X website, NVIDIA is the largest holding company of this ETF, accounting for approximately 18.9% of its net assets.

The Roundhill Generative AI & Technology ETF and the Invesco AI and Next Gen Software ETF both saw gains of around 5%, while other ETFs that saw significant increases include: ROBO Global Artificial Intelligence ETF, Wisdom Tree Artificial Intelligence and Innovation Fund, Global X Artificial Intelligence and Technology ETF, iShares Robotics and Artificial Intelligence Multisector ETF, and ROBO Global Robotics and Automation Index ETF.

In addition, the prices of technology and chip ETFs also received significant boosts.

The iShares Semiconductor ETF and VanEck Semiconductor ETF rose by 4.9% and 6.8% respectively, with NVIDIA being the largest weighting stock in both of these funds.

As for technology ETFs, the Vanguard Information Technology ETF, Technology Select Sector SPDR Fund, and iShares US Technology ETF all rose by over 3% on Thursday.

Surge in demand for call options

In the options market, the previously surging demand for call options continued. According to reports, after NVIDIA's earnings report was released, the volume of call options has surged to over 1 million contracts, reaching the highest level since November last year, with the largest portion of options contracts betting that NVIDIA's closing price on Friday will rise to $800 (currently at $785.38).

The market has also seen an influx of call options for other chip manufacturing companies. In the past month, the options trading volume for AMD has nearly doubled the average level, with call options betting that its stock price will rise to $1000 (currently at $975.52). AMD's call options expiring before Friday were almost in-the-money and became the most traded individual stock options in the afternoon.

There is also strong demand for long-term options, indicating a positive market sentiment towards AI concept stocks in the long run. The premium for NVIDIA's put options has dropped to the lowest level since October last year, while the one-year call options for AMD have seen a premium relative to put options soar to the highest level since May; the skewness of the one-month call options for VanEck Semiconductor ETF hovers near historical highs.However, some opinions believe that the surge triggered by NVIDIA's AI enthusiasm is just in the early stages and will not last forever.

Tom Essaye, founder and president of Sevens Report Research, stated in a report on Thursday:

"The current issue is whether the enthusiasm for artificial intelligence can continue to drive the market higher, or if we need new leadership now to push the S&P 500 index to 5100 points or even higher. On the surface, there are no clear signs of artificial intelligence losing its leadership position."

Jordan Klein, an analyst at Mizuho Securities, said:

"The inspiration and FOMO (Fear of Missing Out) of artificial intelligence are too early and too painful, and many people will not chase after high prices."

"This is the market situation we are in now. It's not to say it's healthy, but it won't last forever either. In the coming months, without enough winners in artificial intelligence (semiconductors), it will be painful for many relative (or even absolute) managers."