Head of Saxo Strats
Nvidia’s GTC AI conference is in full swing and yesterday the world’s leading AI chip maker announced its new Blackwell GPU which is expected to extend the company’s lead in AI chips. The Blackwell GPU platform comes with 2.5x greater performance than its H100 platform (Hopper chip) which will likely widen Nvidia’s leading position. Nvidia also announced a new NVLink switches supporting the trend of AI networking becoming a new growing business in servers. The conference will continue until Thursday and we expect the news flow to continue to be positive for AI related stocks including Nvidia.
Analysts have a 12-month price target of $932 which around 5% higher than the current price with 90% of analysts covering the stock having a positive view on the stock. Nvidia is expected to report FY25 Q1 (ending 30 April) on 24 May with analysts expecting revenue growth of 234% YoY and EPS of $5.44 up 522% YoY.
Unilever, one of Europe’s largest fast-moving consumer goods companies, shares are up 5% this morning as the company is announcing a big restructuring programme to find €800mn in cost savings over the next three years. In our view that is not very ambitious as the world can look very different in three years and the risk is that Unilever never end up achieving those costs savings.
In addition to the cost savings programme, Unilever is separating its global ice cream business which has annual sales of €7.9bn in 2023 and include brands such as Magnum and Ben & Jerry’s. The separation is starting immediately and is expected to be finished by the end of 2025, so again the market may conclude that things are moving too slowly. Analysts have a 12-month price target of GBp 4,256 which is around 6% above the current price. Nike reports FY24 Q3 (ending 28 Feb) earnings on Thursday at 20:15 GMT (21:15 CET). Analysts expect revenue growth down 0.7% YoY and EPS of $0.74 down 6.1% YoY. Nike continues to face tough competition, a sluggish consumer demand, elevated inventory (will likely decline again in the previous quarter), and thus painting a muted picture in the short term. Nike is taking steps to make strategic price hikes and trimming inventory in order to improve operating margins, so this is the key upside potential if management can succeed with this on top of the recent $2bn cost savings programme that was announced. Analysts have a 12-month price target of $119 which is around 20% higher from the current price.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
