Why Nvidia stock is rebounding around 3% after Big Tech earnings

Nvidia stock NVDA rebounded around 3% on Thursday as strong results from Microsoft reignited optimism around artificial intelligence infrastructure spending, lifting semiconductor stocks after a week of heavy selling.

The stock traded around $195.50 in early trading. Intel rose about 12%, while Advanced Micro Devices gained roughly 13%.

The broader market also advanced after Wednesday's selloff following the Federal Reserve's decision to leave interest rates unchanged.

The Nasdaq Composite rose 2%, the S&P 500 gained 1%, and the Dow Jones Industrial Average added 308 points, or 0.6%.

Microsoft drives chip sector rebound

Semiconductor stocks rallied after Microsoft reported strong growth in its Azure cloud business, easing investor concerns that hyperscale technology companies could begin pulling back on artificial intelligence investment.

The iShares Semiconductor ETF climbed more than 7% in early trading, while the PHLX Semiconductor Index looked set to snap a five-session losing streak.

Microsoft also reassured investors by keeping its calendar 2026 capital expenditure plans unchanged, avoiding another sharp increase in spending after several quarters of aggressive AI investment.

Meta Platforms, by contrast, fell about 8% after issuing a softer-than-expected revenue forecast and reporting a 91% decline in second-quarter free cash flow.

The company modestly increased the lower end of its 2026 capital expenditure guidance to a range of $130 billion to $145 billion, compared with its previous outlook of $125 billion to $145 billion.

The mixed results highlighted a shift in investor focus from simply rewarding higher AI spending toward evaluating whether companies can balance investment with profitability and cash generation.

Nvidia recovers after recent selloff

Thursday's gains followed several weeks of pressure on Nvidia shares.

The stock recently lost its position as the world's most valuable listed company to Apple after a sharp decline driven by concerns over AI spending, financing structures, and rising competition in the semiconductor industry.

Investor sentiment was also weighed down by reports that a Chinese company had begun mass-producing key chipmaking equipment, raising questions about future competitive dynamics.

In addition, The Wall Street Journal reported that Nvidia is discussing a roughly $250 billion financing guarantee to support OpenAI's lease of a large data centre project in Ohio.

The proposed arrangement would help OpenAI secure more favourable financing while supporting long-term demand for Nvidia's AI chips.

However, the report also prompted concerns among some investors that financing agreements between Nvidia and its customers could resemble the circular financing structures that emerged during the dotcom era.

Thursday's rally suggested investors were once again focusing on the underlying outlook for AI infrastructure demand, with Microsoft's cloud performance helping restore confidence that spending by the industry's largest customers remains resilient despite growing scrutiny over capital allocation.