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What’s happening: Shares of Nvidia rose on Thursday, after the company released its first-quarter results.
What happened: The world’s most valuable semiconductor company reported stronger-than-expected sales and earnings for its first quarter.
However, market reaction to Nvidia’s beat remained subdued due to management’s weak sales forecast for the second quarter.
How were the results: The Santa Clara, California-based company reported double-digit growth in sales for the first quarter, after the closing bell on Wednesday.
Why it matters: Nvidia faced an export ban on H20 products to China on April 9. This resulted in a charge of $4.5 billion related to H20 excess inventory and purchase obligations. The company generated H20 product sales of $4.6 billion in the first quarter before the fresh export licensing requirements were implemented.
Nvidia’s gross margin of 61% would have been 71.3% if the company hadn’t faced the China-related charge.
Nvidia’s Gaming division posted record revenue. Gaming & AI PC revenue surged 42% to $3.8 billion, while Data Center’s topline jumped 73% year-over-year to $39.1 billion.
“Every nation now sees AI as core to the next industrial revolution, a new industry that produces intelligence and essential infrastructure for every economy. This is the start of a powerful new wave of growth. Grace Blackwell is in full production. We’re off to the races,” CEO Jensen Huang said.
The company repurchased shares worth $14.1 billion and spent $244 million in dividend payments.
Nvidia guided to second-quarter revenue of $45.0 billion, +/- 2%, reflecting an $8.0 billion loss in H20 revenue following the recent export controls. The company expects gross margins between 71.8% and 72.0% for the quarter.
How shares responded: Nvidia’s shares gained 3.3% to close at $139.19 on Wednesday following the release of quarterly results. Over the past couple of years, the company’s results have been followed by a stock rally. This time, the stock gained around 28% through the month prior to the release.
What to watch: Investors will continue monitoring announcements related to trade polices from Trump administration.
Context: The CAD/USD forex pair gained on Thursday as investors digested the latest economic data releases.
Details: Data released on Thursday showed Canada’s current account deficit shrank to C$2.1 billion in the first quarter from C$3.6 billion in the previous quarter. The figure also missed market estimates of a C$3.25 billion gap.
Another release showed that average weekly earnings of non-agricultural workers in Canada rose 4.3% year-over-year in March, following a 5.4% gain in the previous month.
Weakness in the US dollar lent support to the CAD/USD pair on Thursday. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.6% to 99.28.
The Canadian dollar also received support from prospects of the Bank of Canada’s less-dovish stance.
However, lower prices of crude oil, one of Canada’s major exports, weighed on the loonie. WTI crude oil prices dipped more than 1.4% to settle at $60.94 a barrel in Thursday.
The USD/CAD forex pair fell around 0.2% to 1.3809 on Thursday.
What to watch: Investors await the release of economic data on Canada’s GDP growth rate (1630 UAE Time) and budget balance (1900 UAE Time) today. The Canadian economy, which grew an annualized 2.6% in the fourth quarter, is expected to expand by 1.7% in the first quarter.
Canada’s government budget, which recorded a surplus of C$7.6 billion in February, is projected to report a surplus of C$3.0 billion in March.
Other Markets: European indices closed lower on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 0.11%, 0.44%, 0.11% and 0.19%, respectively.
Russia said it has not received any response from Ukraine over its proposal to hold more ceasefire talks in Istanbul next week. The news sent the RUB/USD pair higher in forex trading this morning.
Japan’s retail sales grew by 3.3% year-over-year in April, following a 3.1% rise in the previous month. The latest reading topping market estimates of flat growth lent support to the JPY/USD forex pair.
Chile’s unemployment rate rose to 8.8% in the February-April period, up 0.3 pp compared to the year-ago period. The latest figure coming in above market estimates of 8.6% sent the CLP/USD pair lower in forex trading this morning.
Brazil’s value of outstanding loans grew by 0.7% to R$6.6 trillion in April, compared to a 0.6% gain in the previous month, lending support to the BRL/USD forex pair.
UK’s car production declined 15.8% year-over-year to 59,203 units in April. However, the GBP/USD pair rose in forex trading this morning.
Eurozone’s loans to companies (1200 UAE Time), loans to households (1200 UAE Time) and M3 money supply (1200 UAE Time), Italy’s GDP growth rate (1200 UAE Time), inflation rate (1300 UAE Time) and PPI (1400 UAE Time), Spain’s current account (1200 UAE Time), India’s GDP growth rate (1430 UAE Time), government budget value (1430 UAE Time) and foreign exchange reserves (1530 UAE Time), Turkey’s financial stability report (1500 UAE Time), Brazil’s gross debt to GDP (1530 UAE Time), nominal budget balance (1530 UAE Time) and GDP growth rate (1600 UAE Time), Germany’s inflation rate (1600 UAE Time), Mexico’s unemployment rate (1600 UAE Time), South Africa’s balance of trade (1600 UAE Time), as well as US core PCE price index (1630 UAE Time), personal income (1630 UAE Time), personal spending (1630 UAE Time), goods trade balance (1630 UAE Time), PCE price index (1630 UAE Time), wholesale inventories (1630 UAE Time), Chicago PMI (1745 UAE Time), Michigan consumer sentiment (1800 UAE Time), Michigan consumer expectations (1800 UAE Time), Michigan current conditions (1800 UAE Time), Michigan inflation expectations (1800 UAE Time), Baker Hughes oil rig count (2100 UAE Time) and Baker Hughes total rigs count (2100 UAE Time).
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