The AI boom brings substantial profits, Nvidia suppliers boost Asian tech stocks soar.

On Thursday,Legal foreign exchange trading platform major Asian tech stocks saw significant gains, particularly the regional suppliers of Nvidia, which is the global chipmaker with the highest market value. The company's stocks surged rapidly after it released quarterly earnings that surpassed expectations and forecasted strong demand for artificial intelligence.

Nvidia's key supplier, TSMC, the largest chip manufacturer in Asia, saw its stock price increase by 1.8%, while South Korea's SK Hynix Inc, which supplies memory chips to Nvidia, jumped nearly 6%.

Japanese chip equipment maker Advantest Corp. rose more than 2%, and the stock price of the storage chip giant, Samsung Electronics, also went up by 1.8%.

Nvidia's earnings for the second quarter were stronger than expected, and amid a booming development in artificial intelligence, it presented a robust revenue outlook. The chipmaker's stock price soared more than 9% in after-hours trading, reaching an all-time high.

Nvidia's CEO, Jensen Huang, stated that the AI boom would continue into 2024, and the company plans to buy back $25 billion in stock.

The company's confidence in the AI outlook spurred most tech stocks upward, including heavyweight Asian stocks such as Baidu, Alibaba Group, and Tencent Holdings, which saw their stock prices increase by 1.5% to 3.4%. Among these, Baidu performed the best, with the Chinese search engine giant also delivering strong quarterly results due to growing demand for artificial intelligence.

The demand for artificial intelligence offers a positive and optimistic outlook for the tech industry, especially chip manufacturers, which have been affected by cyclical downturns. Tech investments have also significantly slowed this year amid rising interest rates.

Other major Asian tech stocks also rose. The Japanese conglomerate SoftBank Group increased by 1.1%, benefiting from the AI boom as the company prepares to list its chip design subsidiary, Arm.

On Thursday, Asian exchanges heavily weighted with tech stocks performed the best, with the Hang Seng Index and the Taiwan Weighted Index both climbing more than 1%. The South Korean KOSPI index also grew by 0.8%.

Despite yields still being near the multi-decade highs set this week, a slight retreat in U.S. bond yields also helped lift tech stocks. Market focus is on the upcoming speech by Federal Reserve Chairman Jerome Powell on Friday, with signals on U.S. monetary policy expected to emerge from the Jackson Hole symposium.

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