Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
Access both platforms from your single Saxo account.
London Quick Take – 28 August – Nvidia beats, shares dip, index futures hold up fine + Swiftonomics hits stocks
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
Signet Jewelers – one of the few listed stocks in the jewellery space – is enjoying a rally after Taylor Swift showed off a cushion-cut diamond ring when announcing her engagement to Travis Kelce. Will she single-handedly reverse the long-term decline in marriage rates in the US? I’m not sure but it’s an interesting story and we can envisage a new ‘Taylor Swift’ stock tracker being created. Or an ETF.
Ralph Lauren - Taylor Swift and Travis Kelce wearing Ralph Lauren in engagement photo could prove positive catalyst for stock, investment bank Jefferies says.
American Eagle meanwhile rallied after it announced a partnership with Kelce in the wake of the engagement. It seems a good time for any brand to capitalise. The stock had struggled after Bank of America said its ad campaign with Sydney Sweeney wouldn’t offset the impact of tariffs. Yesterday it jumped 8%. Put this and the others in the new meme stock basket.
Key Points
- Nvidia earnings beat, stock falls – what gives?
- Wall St futures solid after fresh record high for S&P 500
- Swiftonomics sends some shares soaring
- Some important US data to watch today
Wall Street notched a fresh record high before Nvidia results disappointed only a touch, sending shares in the chipmaker lower. But futures are holding up fine. NDX futures traded a 300pt range on the results down to 23,371 but are firming up back towards yesterday’s cash close around 23,565 this morning. The S&P 500 finished up 0.24% to 6,481.40 and is currently implied a touch higher. A batch of interesting tech names alongside Nvidia to run through this morning...
To the big one - Nvidia results – great but not great enough to satisfy some whisper numbers that were higher than consensus forecasts. Shares sold off a touch over 3% in the after-hours market chiefly because data centre revenues – the key AI bit of the business - were a tad lighter than expected. And despite the upbeat guidance for the current quarter that was a little ahead of expectations, the outlook on China remains a bit murky.
Data centre revenue rose 56% year-on-year to $41.1bn, short of an estimated $41.34bn. The company said that $33.8 billion of Nvidia’s data centre sales were for Nvidia’s GPU chips, down 1% from the first quarter because of $4bn fewer H20 sale because it sold none of these chips to China in the quarter. Relaxation of export controls could see Nvidia sell between $2bn and $5bn in H20 chips this quarter – sales not included in the revenue guidance.
Data centre revenue rose 56% year-on-year to $41.1bn, short of an estimated $41.34bn. The company said that $33.8 billion of Nvidia’s data centre sales were for Nvidia’s GPU chips, down 1% from the first quarter because of $4bn fewer H20 sale because it sold none of these chips to China in the quarter. Relaxation of export controls could see Nvidia sell between $2bn and $5bn in H20 chips this quarter – sales not included in the revenue guidance.
Don’t forget gaming – hardly the powertrain of this stock’s massive rerating but still important and impressive, with revenues up 49% to $4.3bn, a fresh record for a quarter and well ahead of expectations. Notable also to look at Nvidia’s other income, which at $2.2bn was driven by its stake in CoreWeave, an AI company offering access to Nvidia GPUs that rose 1755 over the last quarter.
CrowdStrike shares were also down 4% after-hours, having sank as much as 8%, following results as the cybersecurity firm posted a decline in margins.
Snowflake jumped 12% after better-than-expected results from the data cloud and artificial intelligence company.
MongoDB – a developer platform that uses to AI to interrogate data – jumped 38% as earnings beat expectations. Sales growth reaccelerated to 23.7% having dipped to 20% from 31% in fiscal 2024.
NetApp – down 6% after-hours as it only narrowly beat expectations.
To take home from all this is that if you are an AI/chip/tech name of sorts you need to be beating big to jump on the earnings because expectations are running so high and a lot is already priced. But that does not mean that they will stay down for long. In the case of Nvidia, does that set of results imply the bull case is wrong?
Elsewhere and over here
US GDP data – second reading ahead today should be watched, with the preliminary quarterly GDP price index, pending home sales and weekly unemployment claims report. These are not going to be as important as Friday’s monthly PCE inflation report, however.
Gilts (along with other sovereign yields) have bounced back a touch but remain under pressure as markets doubt policy credibility and the BoE frets over inflation. The dilemma is the impending fiscal doom loop of raising taxes and falling output and productivity growth.
The FTSE 100 is flat as a pancake this morning. Glencore, Auto Trader, Games Workshop, Croda, Alliance Witan, Aviva and LondonMetric Property go ex-dividend today, taking about 5pts off the blue chips. Drax shares tumbled 8% after revealing it’s under investigation from the FCA.
Here’s one you may not have heard of – Ulta Beauty reports earnings today after the close. There has been a fair bit of very positive analyst coverage on this stock in the last few days ahead of these earnings, with Canaccord the latest to weigh in by raising its price target on the stock to $630.
Apple’s new iPhone launch date is scheduled for 9 September, with some positive signs on new sizes and pricing, plus offers by carriers to boost sales.
Watch Tesla as the problems in its core EV business seem undimmed with sales in Europe down 40% in July, continuing and indeed accelerating a steady decline reported all year
Newly-minted ‘meme’ stock Krispy Kreme was hit after JPMorgan downgraded the stock to “underweight” from “neutral”.
Which neatly takes us on to the topic of Swiftonomics –
NetApp – down 6% after-hours as it only narrowly beat expectations.
To take home from all this is that if you are an AI/chip/tech name of sorts you need to be beating big to jump on the earnings because expectations are running so high and a lot is already priced. But that does not mean that they will stay down for long. In the case of Nvidia, does that set of results imply the bull case is wrong?
Elsewhere and over here
US GDP data – second reading ahead today should be watched, with the preliminary quarterly GDP price index, pending home sales and weekly unemployment claims report. These are not going to be as important as Friday’s monthly PCE inflation report, however.
Gilts (along with other sovereign yields) have bounced back a touch but remain under pressure as markets doubt policy credibility and the BoE frets over inflation. The dilemma is the impending fiscal doom loop of raising taxes and falling output and productivity growth.
The FTSE 100 is flat as a pancake this morning. Glencore, Auto Trader, Games Workshop, Croda, Alliance Witan, Aviva and LondonMetric Property go ex-dividend today, taking about 5pts off the blue chips. Drax shares tumbled 8% after revealing it’s under investigation from the FCA.
Here’s one you may not have heard of – Ulta Beauty reports earnings today after the close. There has been a fair bit of very positive analyst coverage on this stock in the last few days ahead of these earnings, with Canaccord the latest to weigh in by raising its price target on the stock to $630.
Apple’s new iPhone launch date is scheduled for 9 September, with some positive signs on new sizes and pricing, plus offers by carriers to boost sales.
Watch Tesla as the problems in its core EV business seem undimmed with sales in Europe down 40% in July, continuing and indeed accelerating a steady decline reported all year
Newly-minted ‘meme’ stock Krispy Kreme was hit after JPMorgan downgraded the stock to “underweight” from “neutral”.
Which neatly takes us on to the topic of Swiftonomics –
Signet Jewelers – one of the few listed stocks in the jewellery space – is enjoying a rally after Taylor Swift showed off a cushion-cut diamond ring when announcing her engagement to Travis Kelce. Will she single-handedly reverse the long-term decline in marriage rates in the US? I’m not sure but it’s an interesting story and we can envisage a new ‘Taylor Swift’ stock tracker being created. Or an ETF.
Ralph Lauren - Taylor Swift and Travis Kelce wearing Ralph Lauren in engagement photo could prove positive catalyst for stock, investment bank Jefferies says.
American Eagle meanwhile rallied after it announced a partnership with Kelce in the wake of the engagement. It seems a good time for any brand to capitalise. The stock had struggled after Bank of America said its ad campaign with Sydney Sweeney wouldn’t offset the impact of tariffs. Yesterday it jumped 8%. Put this and the others in the new meme stock basket.
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