Nvidia’s earnings beat and other AI news give markets relief — for now

It’s a good day for the artificial intelligence sector. New partnerships and earnings reports from AI-related companies lifted sentiment which had been battered by fears over AI hitting companies from software to real estate and logistics.

The biggest news was Nvidia’s earnings. The world’s most valuable company reported better-than-expected fiscal fourth-quarter results after the bell Wednesday stateside, clocking 75% revenue growth in its core data center business. The stock rose 1.4% in extended trading. 

CEO Jensen Huang in an interview with CNBC’s Becky Quick said that demand for computing was “off the charts” as AI tech rapidly advances.

When asked about the threat of AI to software, Huang said that “the markets got it wrong.”

“Nobody’s going to service better than ServiceNow, and they’re going to come up with agents that are really fine-tuned and optimized for the work that uses the tools that they have,” he said, adding that AI was “going to help us.”

The anticipated Nvidia report and fellow AI player Oracle’s rating upgrade by Oppenheimer seemed to assuage investors concerns over AI-led disruption, giving U.S. markets a boost Wednesday. The Dow Jones Industrial Average jumped 300 points, the S&P 500 added 0.81% and the Nasdaq Composite advanced 1.26%.

Dan Niles, founder of Niles Investment Management, struck a cautious note though: “People need to remember that all everything, whether it’s the railroads, canals, the internet, etc, all of these things tend to get overbuilt, and then we figure out who the winners and losers are going to be. And I think that’s what the market is struggling with,” he said on “Squawk Box Asia” this morning.

He warned that “there are some real companies that are going to go to zero in the software space.”

Signaling concerns had not fully dissipated, Salesforce on Wednesday gave mixed guidance for its fiscal first quarter, sending its stock tumbling nearly 5% in after-hours trading. The software maker’s revenue, however, grew 12% year over year in its fiscal fourth quarter, its fastest growth rate in two years. 

— CNBC’s Anniek Bao, Becky Quick, Sean Conlon and Pia Singh contributed to this story.

Thrive Capital pumped about $1 billion into OpenAI at a $285 billion valuation in December, a source confirmed Wednesday. The venture capital firm has been one of the AI startup’s major financial backers. The Wall Street Journal was first to report on Thrive’s investment.

Nvidia and Oracle lifts U.S. markets. Wall Street closed in the green on Nvidia’s anticipated after-the-bell report…