Join our daily newsletter At The Bell to receive exclusive market insights
AI microchip giant NVIDIA reported earnings overnight, and if you subscribe to my cynical philosophy that analysts lowball earnings expectations ahead of big client results, it’s no surprise the NASDAQ goliath posted an earnings beat.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
Cue a +1.5% jump for the Nasdaq, while the S&P jumped over +1% and the Dow (which only has 30 companies in its index, don’t forget) ended green.
Perhaps the bigger news for Australian-minded smallcap investors coming out of the U.S. overnight is that the U.S. smallcap index, the Russell 2000, surged +2.6% overnight, after being caught up in the wave of optimism.
For its part, the strength of NVIDIA’s results is possibly best captured by its US$50.3B net cash figure, larger than the market cap of most ASX100 companies. Revenues climbed above US$80B.
There is perhaps one point over which to raise an eyebrow when trying to assess what the between-the-lines story is with reaction to NVIDIA’s earnings overnight: The company is boosting its dividend to 25c, alongside flagging another US$80B share buyback.
I’ve written before for this masthead multiple times a fat divvy is often a way to win favour from investors, which is also what at least one Bank of America analyst wrote in the lead-up to the results being released. Talk about prescient.
But it isn’t just the NVIDIA earnings result that’s driving the XJO up +1.7% higher on Thursday – at the same time, we’ve had renewed claims from the Trump Administration that peace talks between the US and Iran are in the “final stages.”
Perhaps this on its own wouldn’t have been enough to generate the reaction we’re seeing on the local bourse today, but combined with the NVIDIA beat – and don’t forget NVIDIA dominates the portfolios of funds everywhere, as well as representing over 8% of the NASDAQ’s total value – it appears the market may be more willing to accept Trump’s latest iteration of reality.
Join the discussion: See what’s trending right now on HotCopper, Australia’s largest stock forum, and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
