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International markets pop off on Nvidia-fueled monster rally

International market indices, like Japan's Nikkei 225 (^N225) and Europe's STOXX 600 (^STOXX), are moving higher after Nvidia (NVDA) reported better-than-expected earnings results in its fourth-quarter report. The company's earnings have sent a ripple effect through both the US and global equity markets as many on Wall Street continue to buy into the AI hype.

Yahoo Finance Anchors Rachelle Akuffo and Akiko Fujita break down the latest developments for international markets and what the Nvidia-fueled rally could mean for the AI boom moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video transcript

AKIKO FUJITA: Nvidia, shares of the AI powerhouse surging today and pulling markets up with it after reporting a massive sales growth in its fourth quarter and issuing guidance well above expectations. It isn't just boosting stocks in the US. Of course, we are seeing the global trade on AI. European stocks and the Japanese Nikkei index also jumping on this report.

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And worth noting here, Rachelle, we did see the Nikkei over in Japan blowing past that record they set back in the 1980s. Of course, this isn't just about Nvidia but we did see chip makers up broadly here, worth pointing out, where they are Samsung, SK Hynix, TSMC, Tokyo Electron equipment maker, Advantest, which supplies to Nvidia also seeing a big pop. And then of course SoftBank because they have a 90% share here in arm also gaining. So really a broad-based global gain here for chip stocks on the back of really what was a blowout quarter, another blowout quarter from Nvidia.

RACHELLE AKUFFO: I mean and you have to think, I can't remember the last time that one ticker, one stock could have this much of a rippling impact, really, across all markets here. We mentioned the Europe STOXX 600, which is that the index is equivalent to the S&P 500 here in the US. So it's a broad market makeup, large, mid, and small caps.

But when you look and dig down into the STOXX 600 tech index, some of the names being impacted include ASML, a semi-maker, as we talk about Samsung here selling off its remaining stake so that it can focus on even more aspects of the chips arena here.

And when you look at and you mentioned Samsung in terms of competing with SK Hynix, these high bandwidth memory chips, these are the ones that support Nvidia's accelerators in training AI. So when you look at the tentacles of everything that's attached to NVIDIA as well as what services it, this really seems to be something unprecedented, Akiko.

AKIKO FUJITA: Yeah, and Rachelle, it's not just about the quarter they reported, obviously, that's backwards-looking, it is about the demand that Jensen Huang, a CEO of Nvidia, has said is coming. In an interview he said specifically, "We're in the first year of a 10-year cycle of really massive AI adoption here." So if this is the first year, you got to wonder where investors think this could go.

There is, of course, the broader concern about capacity, that's something we're going to get into with our next guest. But as it stands right now, it certainly feels like there's no stopping that demand picture for Nvidia.