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There’s one story dominating the pages of the world’s business press today: Giant US chipmaker Nvidia reported 2Q earnings after the bell yesterday that beat bottom and top line expectations. However, investors — who have kept their eyes peeled for the AI juggernaut’s results for signs of how the AI boom is faring — are skeptical about the road ahead for the company and have driven down its share price in after-hours trading.
By the numbers: The company’s net income grew 168.2% y-o-y to USD 16.6 bn, delivering an earnings per share of USD 0.68 cents, compared to LSEG consensus expectations of USD 0.64. Revenues also came in a good notch above expectations, rising 122.4% y-o-y to USD 30.0 bn, exceeding analyst expectations of USD 28.7 bn.
This wasn’t enough to buoy stocks at the world’s second biggest company: Nvidia shares had fallen about 8% in extended trading at the time of writing, after its 3Q forecasts failed to impress investors — representing a roughly USD 200 bn drop in market value.
Nvidia has become a victim of its own success: Despite beating analysts expectations in 2Q and AI chip demand appearing to be much healthier than some had feared, the success of the company has led to some investors to price in incredibly high expectations for the company going forwards. The company expects to see USD 32.5 bn in revenues for the third quarter — plus or minus 2% — but this roughly 80% y-o-y increase that is a notch above analyst expectations isn’t enough for some investors.
But it’s going to take a lot to knock one of Wall Street’s most hotly watched stocks off course: Even if Nvidia does take a hit on the stock market in the coming days, the company’s share value is already up around 160% since the start of the year. Nvidia stocks alone have contributed more than a quarter of the S&P 500’s gains so far this year, helping to propel the company to be the world’s second biggest company, behind only Apple.
MARKETS THIS MORNING-
Asian markets are down in the red in early trading this morning, as investors assess how Nvidia’s share slump following its earnings release will affect the region as an important global hub for engineering chip parts. Tech and electronics companies are pushing down indexes across the region, with Korea’s Kopsi down 0.7%, Japan’s Nikkei down 0.4%, and China’s Hang Seng down 0.3%.
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TASI |
12,117 |
-0.5% (YTD: +1.3%) |
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MSCI Tadawul 30 |
1,512 |
-0.8% (YTD: -2.5%) |
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NomuC |
26,221 |
-0.6% (YTD: +6.9%) |
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USD : SAR (SAMA) |
USD 3.75 Sell |
USD 3.75 Buy |
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Interest rates |
6.5% repo |
5.5% reverse repo |
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EGX30 |
30,710 |
+1.1% (YTD: +23.4%) |
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ADX |
9,289 |
-0.5% (YTD: -3.0%) |
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DFM |
4,324 |
-0.4% (YTD: +6.5%) |
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S&P 500 |
5,592 |
-0.6% (YTD: +17.2%) |
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FTSE 100 |
8,344 |
0.0% (YTD: +7.9%) |
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Euro Stoxx 50 |
4,913 |
+0.3% (YTD: +8.7%) |
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Brent crude |
USD 78.65 |
-1.1% |
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Natural gas (Nymex) |
USD 1.93 |
+1.4% |
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Gold |
USD 2,537.80 |
-0.6% |
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BTC |
USD 59,361.90 |
-4.0% (YTD: +39.8%) |
THE CLOSING BELL: TADAWUL-
The TASI fell 0.5% yesterday on turnover of SAR 6.85 bn. The index is up 1.3% YTD.
In the green: Red Sea (+9.9%), Amiantit (+6.7%) and Al Akaria (+5.6%).
In the red: Jabal Omar (-3.5%), SNB (-2.4%) and Tadawul Group (-2.4%).
THE CLOSING BELL: NOMU-
The NomuC fell 0.6% yesterday on turnover of SAR 65.5 mn. The index is up 6.9% YTD.
In the green: Al Rasheed (+12.5%), Al Ashghal Al Moysra (+7.1%) and Knowledge Tower (+7.1%).
In the red: Naas Petrol (-26.5%), Mulkia (-8.1%) and Naba Al Saha (-5.0%)
CORPORATE ACTIONS-
Qassim Cement will distribute SAR 143.6 mn in dividends at SAR 1.30 per share for 1H 2024, it said in a disclosure to Tadawul. Distribution is set for Sunday, 15 September.
Enma Alrawabi’s BoD greenlit a SAR 10 mn dividend distribution at SAR 0.25 per share for 1H 2024, it said in a disclosure to Tadawul. Distribution is set for Thursday, 12 September.
