Wall Street ignited on Thursday, mainly supported by the rally of Nvidia (+16.4%!) after a publication of results significantly higher than market expectations. The S&P 500 gained 2.11%, to its peak at 5,087 pts, while the Dow Jones gained 1.18% to 39,069 pts. The Nasdaq soars by 2.96% to 16,041 pts. On the Nymex, a barrel of WTI crude advanced 0.1% to $78. The dollar index changes little against a basket of reference currencies…
Nvidia therefore largely dominated the debates today, up more than 16%. The title of the graphics and AI chip giant had nevertheless fallen cautiously in the middle of the week, bringing its performance this year to 40%… The test was important for Jensen Huang’s group and the American stock market as a whole: The Californian group did not disappoint, quite the contrary, which is very good news given its contribution to the performance of the S&P 500 and Nasdaq indices. Nvidia has indeed become the “leader” of the stock market rally in artificial intelligence.
Among the economic indicators of the day, investors were attentive to the weekly unemployment claims for the week ended February 17 (201,000 against 217,000 FactSet consensus), as well as to the national activity index of the Chicago Fed for the month of January (consensus -0.3, compared to -0.2 consensus and +0.02 for the revised reading of the previous month).
The preliminary American composite PMI index for February 2024 stood at 51.4, compared to the FactSet consensus of 51.5 and 52 a month before. The flash manufacturing index for February stood at 51.5 versus the consensus 50.2, while the services index came in at 51.3 versus the estimate of 52.
Resales of existing homes in the United States for the month of January 2024 totaled 4 million, up 3.1% month-on-month and down 1.7% year-on-year. The consensus was 3.98 million, while the revised reading for December stands at 3.88 million.
According to the CME Group’s FedWatch tool, the probability of a new monetary status quo from the Fed on March 20, at the end of its next monetary meeting, reaches 96%. For the next meeting, the probability of status quo stands at over 73%, which would leave rates between 5.25 and 5.5%. The first relaxation could therefore take place on June 12…
Values
Nvidia soars 16.4%, to historic highs, after two delicate sessions awaiting its quarterly results. After having already tripled over one year, the stock continues its rally, stimulated by results above expectations, with triple-digit growth, and robust forecasts supporting the thesis of sustainable demand for its artificial intelligence products. The gain in market capitalization today reaches more than 250 billion dollars, unprecedented in the history of the American stock market!
For its fourth quarter, Jensen Huang’s group, a graphics and AI chip giant, once again easily beat the consensus, generating adjusted earnings per share of $5.16 compared to a consensus of 4. $60, for revenues of $22.1 billion compared to a market consensus of $20.4 billion. Data center revenues were 18.4 billion, much higher than the consensus of 17.2 billion and growing by more than 400% compared to the previous year. Quarterly net profit soared by almost… 770% to $12.3 billion!
Nvidia therefore achieved revenues for the fourth quarter ended January 28, 2024 of $22.1 billion, up 22% compared to the previous quarter and… 265% compared to last year . For the quarter, GAAP earnings per diluted share were $4.93, up 33% from the previous quarter and…765% from last year. Non-GAAP earnings per diluted share were $5.16, up 28% from the previous quarter and 486% from last year.
For fiscal 2024, revenue increased 126% to $60.9 billion. GAAP earnings per diluted share were $11.93, up 586% from a year ago. Non-GAAP earnings per diluted share were $12.96, up 288%. “Our data center platform is driven by increasingly diverse drivers: demand for data processing, training and inference from large cloud service providers and those specializing in GPUs, as well as enterprise software and consumer Internet companies. The vertical industries – dominated by automotive, financial services and healthcare – are now worth several billion dollars,” explains Jensen Huang. “Nvidia RTX, introduced less than six years ago, is now a massive PC platform for generative AI, loved by 100 million gamers and creators. The coming year will be marked by major new product cycles and exceptional innovations that will help propel our industry forward,” said the CEO.
Nvidia will pay its next quarterly cash dividend of $0.04 per share on March 27, 2024 to all shareholders of record on March 6, 2024. “Accelerated computing and generative AI have reached a tipping point. Demand is increasing across the globe. the world, in companies, sectors and countries”, summarized Huang, founder and boss of the group. For the first fiscal quarter just started, the group expects revenues of $24 billion, plus or minus 2%, while analysts expected an average of $22 billion. Adjusted gross margin is expected at 77%, plus or minus 50 basis points.
Synopsys (+6.8%), the American software group active in the design and verification of integrated circuits, unveiled yesterday evening accounts for the first fiscal quarter that were higher than market expectations. For the quarter ended at the end of January 2024, Synopsys posted revenues of $1.65 billion, compared to a level of $1.36 billion a year earlier. Adjusted earnings per share came in at $3.56 versus a consensus of $3.43. For the current quarter, second fiscal quarter 2024, revenues are anticipated between 1.56 and 1.59 billion dollars, a range higher than expectations (1.55 billion consensus), while adjusted EPS should be between 3. 09 and $3.14 – versus $3.01 consensus. Fiscal 2024 revenues are expected between $6.57 billion and $6.63 billion, a confirmation of previous guidance.
Rivian (-25.6%), the American designer of electric vehicles falls on Wall Street. The group has just reduced its production forecasts and announced plans to reduce its workforce. Over the closed quarter, the group achieved revenues of $1.32 billion versus a consensus of $1.25 billion, while the adjusted loss per share was heavier than expected at $1.36. The adjusted EBITDA loss was $1.096 billion, somewhat reduced from last year’s level of $1.46 billion, but larger than expected. The net loss represented 1.52 billion. RJ Scaringe, CEO of Rivian, highlights the progress made in 2023 despite economic difficulties.
However, the 2024 vehicle production targets are very disappointing at only 57,000 units, compared to 80,000 previously estimated and 57,232 in 2023. The 2024 adjusted Ebitda loss is expected at $2.70 billion. Citing economic uncertainty, the group will cut 10% of its workforce. At the end of December, the cash and equivalents position was $7.86 billion.
Lucid plunges 16.7%, while the electric vehicle designer expects annual production to be lower than expected. In its fourth fiscal quarter, the group delivered 1,734 units and produced 2,391 vehicles. Annual production reaches 8,428 cars in 2023. Revenues for the fourth quarter amounted to $157 million, for an annual total of $595 million. The quarterly net loss widened to $654 million, compared to $473 million a year before. The production guidance for 2024 is around 9,000 vehicles.
Intel (-1.1%) said it plans to overtake TSMC (Taiwan Semiconductor Manufacturing Co) in advanced chip production this year, after previously setting such a target for 2025. The announcement was carried out as part of the Intel Foundry conference. Intel is banking on its ’18A’ technology to achieve this. The group intends to maintain its lead in 2026 with 14A technology. He assures that four major customers, whose names he did not give, have already signed for his 18A production technology. Intel will also produce high-end chips for Microsoft (+2.3%) to compete with TSMC and Samsung, according to the Financial Times. Satya Nadella, the boss of Microsoft, confirmed that the group’s new chips would use Intel Foundry. Intel for its part specified that the Redmond software giant would use its 18A technology…
Moderna (+13.5%), the American laboratory, announced for its fourth quarter an unexpected profit of $217 million and 55 cents per share, while analysts feared a loss. The Massachusetts vaccine developer achieved sales of $2.8 billion on its Covid-19 vaccine in the quarter, which represents a drop of 43% compared to last year, but is in line with the market consensus. . The group maintains its 2024 revenue guidance of $4 billion, compared to the consensus of $4.5 billion – which would represent a drop of a third compared to 2023.
Royal Caribbean (+6.6%) raised its profit forecasts, citing higher than expected reservations for its cruises. The group is therefore raising its adjusted earnings per share forecast for 2024 by $0.40 compared to February estimates. For the full year, adjusted EPS is expected to be between $9.90 and $10.10. Approximately $0.15 of the increase in full-year adjusted EPS is due to the improved revenue outlook for the first quarter of 2024…
