Morning Brew August 29 2024

Good morning,

Nividia reported earnings and here is Peter`s initial takeaway: Quick take on Nvidia earnings

Nvidia has just reported FY25 Q2 (ending 28 July) results after the US market close. Below are the key take-aways from the result.

• Shares are trading 2-5% lower as the initial reaction is muted
• Q2 revenue at $30bn vs est. $28.9bn up 122% YoY driven by an upside surprise in its data center business. Q2 revenue is an increase of $4bn compared to the previous fiscal quarter.
• Q2 adjusted EPS at $0.68 vs est. $0.65 reflecting improved gross margin at 75.7% vs est. 75.5%
• Q3 revenue outlook is $32.5bn plus or minus 2% against consensus at $31.9bn
• The board of directors has approved an additional $50bn in buyback of own shares
• Samples of the new Blackwell AI chips are being shipped to partners and customers. Production will be ramped up in fiscal Q4 which ends in January 2025.
• Expects several billion dollars of revenue inFY25 Q4 from Blackwell chips

The shares ended late trading at 120.36 and are down 7% in Frankfurt this morning. 

Before the results, markets had shown some nerves with the S&P 500 -0.60%, the Nasdaq -1.10% and the Dow at -0.40% with again low volumes at below 10 billion shares traded.

Super Micro Computer and Berkshire Hathaway were the most interesting stocks besides Nvidia. Super Micro Computer lost 20% a day after Hindenburg Research issued a warning and the company announced the delay of the quarterly report. This is of particular interest as SMCI is one of Nvidia`s largest clients. Berkshire Hathaway's market cap exceeded closed above $1 trillion for the first time.

Yields traded calmly and the USD index as well, gold and silver swung strongly on the futures expiry and month end value date, today both are recovering to 2519 and 29.55.

With Nvidia earnings out of the way, eyes will turn to economic data:

As John Hardy pointed out yesterday, the Fed wants to cut by 50 basis points in September but needs data to allow it. There are three data points that need to align:

• The PCE tomorrow expected at 2.7% and 2.6% core,
• The Nonfarm Payroll & Unemployment rate on September 6
• The CPI on September 11

Thursday
- Data Consumer Confidence, Germany Inflation, US GDP, Initial Jobless claims.
- Earnings Bank of China, China Merchants Bank China Life Insurance Canadian Imperial Bank Dell Technologies, Marvell Technology Autodesk
Speakers: Raphael Bostic
Friday
- Data Japan CPI (Tokyo) AU retail Sales, CH KOF Indicator, DE Unemployment, EU HICP, US PCE, Canada GDP, University of Michigan