Martin Gamble on US markets: Nvidia closes on $6 trillion valuation

US markets marched to new highs this week led by the tech-heavy Nasdaq Composite. It was buoyed by the blockbuster IPO of semiconductor firm Cerebras, whose shares doubled on their debut, giving the company a market value of around $100 billion.

The interest rate sensitive small company Russell 2000 index lagged as bond yields moved higher. This followed stronger than expected inflation data and resilient retail sales. US 10-year treasury yields climbed through 4.5%, their highest in more than a year.

Brent crude prices remained elevated above $105 per barrel as Middle East negotiations saw little progress.

Investor enthusiasm for AI spilled over into carmaker Ford with the shares gaining 17% after analysts at Morgan Stanley highlighted the underappreciated opportunity for the car maker’s energy storage division to serve data centres.

Nvidia market value approaches $6 trillion

The world’s largest company is scheduled to reveal first quarter earnings after the market close on 20 May and another earnings beat and raise seems a must for the AI posterchild.

The shares are trading at all-time highs of $236, taking the chip designer’s market value to just shy of $6 trillion.

President Trump’s China visit this week seems to have paid off for Nvidia at least with Reuters reporting the US administration has given clearance to around 10 Chinese firms to buy Nvidia’s second-most powerful AI chip, the H200.

Analysts are looking for revenues of $78.6 billion, representing year-on-year growth of 78% and consensus earnings per share of $1.76, with some analysts as high as $1.99.

Prediction markets are pricing in a 90% chance of another earnings beat. Nvidia is increasingly providing the software infrastructure and software systems needed to run its high-end Blackwall and Rubin chips efficiently.

The company is looking to grab a piece of the fast-expanding AI inference market and recently revealed its Vera CPU (Central processing units) architecture.

Cisco Systems breaks through dotcom highs

Networking equipment maker Cisco Systems jumped as much as 17% to a new high of $119 on 14 May, finally surpassing its dotcom era high, after reporting earnings per share ahead of consensus analysts’ forecasts for the fourth consecutive quarter.

CEO Chuck Robins commented: “Cisco delivered record quarterly revenue in Q3 and we saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing AI.”

The California-based company supplies high speed switches and routers that data centres use to run AI models.

Cisco nearly doubled its fiscal 2026 AI infrastructure orders target to $9 billion from $5 billion after already booking $5.3 billion in AI orders from hyperscalers so far in fiscal 2026.

The company raised its revenue projection to a range of $62.8 billion to $63 billion for the year to end of July 2026 compared with current consensus estimates of $61.6 billion.

The strong earnings report had a positive knock-on effect on network equipment makers Arista Networks and Hewlett Packard Enterprise whose shares gained between 4% and 6%.

Alibaba boosted by AI growth

Despite a big drop in quarterly profit, shares in US-listed Chinese tech and e-commerce play Alibaba surged ahead.

Earnings before interest, tax and amortisation were down 84% at $750.9 million.

Yet Investors were ultimately won over to the merits of the company's heavy spending on AI and so-called quick commerce or instant retail – delivering small orders of household goods and groceries to customers in under 30 minutes.

Helping to make the case was the strong growth the company put up in AI and cloud computing. The company is developing its own chips as it looks to play its part in the increasingly competitive AI infrastructure space. CEO Wu Yongming says AI demand is so strong it will have to spend more in this area over the coming five years than previous projections.

The company also recently announced it would launch an AI powered assistant, backed by its Qwen AI model, in its main e-commerce platform in China – Taobao.