ASX edges higher as tech stocks jump; Virgin surges

The Australian sharemarket has advanced at the open after a solid night on Wall Street, with stocks jumping as Nvidia, Salesforce and others reported fatter profits than expected.

The S&P/ASX 200 was up 19.5 points or 0.2 per cent to 9057.7 in early trade.

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

The ASX lost 1 per cent on Thursday. The Australian dollar was stronger at US71.95¢.

Harvey Norman reported that net profit increased 2 per cent to $528.5 million in the financial year while Virgin Australia saw underlying pre-tax earnings surge by more than 13 per cent to $753 million. Virgin will pay a dividend of 7.6¢ a share.

On Wall Street, Nvidia was the strongest force pulling the market higher, and the chip giant rallied 8.7 per cent 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 per cent 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 per cent 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.