European markets rallied at the opening bell on Thursday as investors reacted to strong earnings from leading artificial intelligence company Nvidia. The pan-European Stoxx 600 rose 1% in the first few minutes of trading.

Nvidia released its third-quarter results after the opening bell on Wednesday, beating fourth-quarter revenue and sales estimates. The chipmaker posted a 62% year-over-year revenue surge to $57.01 billion and said it expects revenue of $65 billion in the fourth quarter.

"There's a lot of talk about an AI bubble," Nvidia CEO Jensen Huang told investors on the earnings call. "From our perspective, we're seeing something very different."

In Asia, chip stocks rallied in early trading on Thursday, with Samsung Electronics and Hon Hai Precision Industry, also known as Foxconn, rising in the region's indexes.

U.S. stock futures also rose late Wednesday, as Nvidia's results provided a boost to the broader market.

Ben Barringer, global head of technology research and investment strategist at Quilter Cheviot, told CNBC's "Europe Early Edition" that Nvidia had provided a two-fold relief: beating gross margins, which is crucial for semiconductor stocks, but the company also directly addressed market concerns in its earnings report.

"They really went out of their way to refute almost every bearish case that existed. They talked about the scaling laws, they talked about all the different elements of demand, not just hyperscaler capex, but also the model demand they're seeing from companies like OpenAI and Anthropic, software demand, enterprise demand, and sovereign AI," Barringer said.

Elsewhere, investors will be paying attention to defense-related stocks after the European Aerospace and Defense Index hit a two-month low on Wednesday and ended the day about 1.9% lower. This move came as senior US Pentagon officials arrived in Ukraine to hammer out a peace plan Wednesday night.

With earnings season winding down, Europe is in for a quieter day. However, investors will likely be watching Walmart, which is expected to release its financial results before the US market opens.

European data organization Eurostat will release GDP and employment data by industry for 2024.

Data showed on Wednesday that the UK's annual inflation rate fell to 3.6% in October, raising the possibility of a December interest rate cut by the Bank of England. This comes a week before the government's high-stakes Autumn Budget. The pound sterling exchange rate against the US dollar was little changed overnight. (alg)

Source: CNBC.com