'AI Bubble' Fears Put To Rest? Micron, Intel, AMD Stocks In Spotlight Post Strong Nvidia Results

Wall Street investors are likely to keep their eyes locked on the stocks of tech majors like Intel Corp., Advanced Micro Devices Inc., and Micron Technology Inc. on Thursday.

Pre-market activity indicated that all three scrips were set for a strong opening. Shares of AMD were up nearly 4.5% at $233.6 apiece as of 7:49 a.m. EST, while those of Intel and Micron traded 2.27% and 2.66% up at $35.85 and $231.98, respectively.

AMD declined nearly 3% to settle at $223.55 on Wednesday, whereas Micron's stock also closed 1.13% lower at $225.92. However, Intel had closed in the green, up 2.27% at $35.11.

Meanwhile, Nvidia's stock was up nearly 5.18% higher in pre-market trade at $196.23.

The main driver for AMD, Micron and Intel's expected rally is bellwether Nvidia's robust third quarter earnings. The titan chipmaker beat estimates by reporting a 62% year-on-year surge in its revenue to $57 billion.

Nvidia's net income also soared 65% in the quarter under review, compared to $19.31 billion in the year-ago period.

These financials eased the 'AI bubble' anxieties and restored the faith of investors in AI-linked tech companies.

The 'AI bubble' essentially refers to the possibility of the AI boom having outrun the fundamentals, where the stock valuations of AI-linked tech companies are seen as inflated as compared to their profit and revenue.

Jensen Huang, CEO and founder, Nvidia commented on the so-called 'AI bubble' in post earnings concall. "There's been a lot of talk about an AI bubble. From our vantage point, we see something very different. As a reminder, Nvidia Corporation is unlike any other accelerator. We excel at every phase of AI."

The company is targeting approximately $65-billion revenue for the fourth quarter, as per Colette Kress, chief financial officer and executive vice president of Nvidia.

Nvidia recently bought $5 billion worth of stake in Intel Corp. after partnering with the company to develop custom AI infrastructure, while Micron supplies memory products like High Bandwidth Memory to Nvidia.

Though AMD and Nvidia are essentially rivals, Nvidia's position as a bellwether company is going to set the investor's mood for the industry itself, hence triggering the probable stock boost for all these players.