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Nvidia tops earnings on AI wave among tech firms

Thursday, February 22, 2024

Today’s headlines

What’s happening: Shares of Nvidia surged in after-hours trading on Wednesday, following the company’s fourth-quarter results.

What happened: The chipmaker reported stronger-than-expected sales and earnings for its latest quarter, which also sent the shares of other chipmakers and AI hardware companies higher in extended trading on Wednesday.

However, Nvidia reported a slight decline in the sales of one of its major sectors during the fourth quarter.

How were the results: The Santa Clara, California-based company reported a surge in sales for the fiscal fourth quarter, which ended January 28.

  • Revenues jumped 265% year-over-year to $22.10 billion, which beat the consensus estimates of $20.62 billion.
  • Non-GAAP earnings came in at $5.16 per share, topping Wall Street expectations of $4.64 per share.

Why it matters: Nvidia’s stock has been a major beneficiary of the race among tech firms to integrate AI into their products. Its shares skyrocketed to a record high of $746.11 on February 12, to become the world’s fourth most valued company. However, the stock pared some gains ahead of the earnings report, falling to the sixth spot in terms of market valuation. Shares of the chipmaker had climbed 240% in 2023.

Earlier this month, Nvidia signed an agreement with Cisco Systems, the world’s largest provider of networking gear, which provides the chipmaker a new distribution channel.

Nvidia’s datacentre sales jumped 409% to $18.4 billion, while gaming revenues gained 56% to $2.9 billion during the latest quarter. Revenues from the Professional Visualization sector climbed 105% to $463 million, while Automotive revenues contracted by 4% to $281 million.

“Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations,” CEO Jensen Huang said during the earnings called. Huang was dubbed “Godfather of AI” by Wedbush analyst Daniel Ives.

Management guided to revenues of $24.0 billion, plus or minus 2%, for the first quarter, higher than market expectations of $22.16 billion. They projected non-GAAP gross margins of 77.0% for the quarter.

How shares responded: Nvidia’s shares climbed 9.1% to $735.95 in the after-hours trading session following the release of quarterly results on Wednesday. The stock is up more than 40% year to date, outperforming the iShares Semiconductor ETF.

What to watch: Investors will continue monitoring increasing AI investments by tech majors. New export rules for chips to China will remain a major concern for Nvidia, as the Asian nation is the biggest market for semiconductors.

The markets today

The euro will be in focus today ahead of a basket of major economic reports

Context: The EUR/USD forex pair moved higher on Wednesday as investors assessed the latest economic data.

Details: The Eurozone’s consumer confidence indicator rose by 0.6 points from the prior month to a reading of -15.5 in February. The figure also topped market estimates of -15.5.

Latest data published by the European Central Bank showed a slight decline in wage growth to 4.46% in the final quarter of 2023, from a record 4.69% in the prior quarter. Markets believe this may not prove enough to convince ECB policymakers to announce a rate cut at their upcoming policy meeting in March. Traders now widely expect the ECB to reduce interest rates in May.

Some weakness in the US dollar also lent support to the EUR/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell to 104 on Wednesday after the latest FOMC minutes showed that the Fed is still concerned about lowering interest rates too soon.

The euro maintained its gains for the sixth session in a row versus the greenback, trading close to three-week high levels.

The EUR/USD forex pair gained around 0.1% to 1.0819, while the STOXX Europe 600 Index fell 0.17% to settle at 491.05 on Wednesday.

What to watch: Investors await the release of economic data on manufacturing PMI, services PMI and inflation rate from the Eurozone today. The HCOB Eurozone manufacturing PMI is expected to increase to 47 in February, from 46.6 in January, while the services PMI is projected to rise to 48.8 in February, from 48.4 in the previous month.

Analysts expect the Eurozone’s inflation rate to ease to 2.8% year-over-year in January, from 2.9% a month ago.

Other Markets: US trading indices closed mixed on Wednesday, with the Dow Jones index and S&P 500 up by 0.13% and 0.13%, respectively, and the Nasdaq 100 down by 0.38%.

The news shaping the markets

The European Union announced the approval of its 13th package of sanctions against Russia, which will add around 200 individuals and entities to the sanctions list. The news sent the RUB/USD pair lower in forex trading this morning.


The Bank of Korea held its base rate at 3.5% during its latest meeting, lending support to the KRW/USD forex pair.


Japan’s au Jibun Bank composite PMI declined to 50.3 in February, compared to 51.5 in January, which sent the JPY/USD pair lower in forex trading this morning.


Australia’s Judo Bank manufacturing PMI dipped to 47.7 in February, from 50.1 in the prior month. The country’s manufacturing activity entering the contraction zone exerted pressure on the AUD/USD forex pair.


New Zealand’s trade deficit shrank to $0.976 billion in January, from $2.095 billion in the year-ago month, sending the NZD/USD pair higher in forex trading this morning.

What else to watch today

India’s composite PMI, manufacturing PMI, services PMI and monetary policy meeting minutes, France’s manufacturing climate indicator, business climate indicator, composite PMI, manufacturing PMI and services PMI, Germany’s composite PMI, manufacturing PMI and services PMI, Italy’s inflation rate, UK’s composite PMI, manufacturing PMI and services PMI, Central Bank of Turkey’s interest rate decision, Mexico’s gross domestic product, inflation rate and monetary policy meeting minutes, Canada’s retail sales, US Chicago Fed national activity index, initial jobless claims, continuing jobless claims, composite PMI, manufacturing PMI, services PMI, existing-home sales, natural gas stocks change, crude oil inventories, gasoline stocks change and distillate inventories, as well as Argentina’s economic activity estimator.


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