Nvidia Earnings Disappoint Despite Record Profits, Impacting Global Markets and AI Sector

Asian markets struggle as traders weigh geopolitical tensions

Hong Kong (AFP) - Asian investors struggled Wednesday to track a positive lead from Wall Street as they assess the prospect of an escalation in the Russia-Ukraine war, Donald Trump's second presidency and the outlook for US interest rates. They were also keenly awaiting the release of earnings from chip behemoth Nvidia later in the day, which many see as a bellwether of the tech sector and AI demand that have helped power markets to multiple record highs this year. Traders were treading carefully this week amid uncertainty after Trump's re-election and as he picks his cabinet, with several China hawks up for key positions fanning worries of another trade war between the economic superpowers. The tycoon has pledged to ramp up tariffs on imports, with China particularly in his sights, but observers warn that such a move -- along with planned tax cuts -- could relight still stubborn inflation. That has dampened hopes for several Federal Reserve interest rate cuts next year. Meanwhile, the war in Ukraine has burst back into the thoughts of traders as Moscow vowed to react "accordingly" after saying Kyiv had fired its first US-made long-range missile into Russian territory. Washington this week said it had cleared Kyiv to use the US-supplied Army Tactical Missile System against military targets inside Russia -- a long-standing Ukrainian request. Russian Foreign Minister Sergei Lavrov said the attack showed Western countries wanted to "escalate" the conflict, adding that "we will be taking this as a qualitatively new phase of the Western war against Russia". President Vladimir Putin signed a decree Tuesday lowering the threshold for using nuclear weapons, which the White House, Britain and the European Union called "irresponsible". Growing worries that the war will ramp up to another, more dangerous level weighed on sentiment in Europe but the S&P 500 and Nasdaq rose for a second straight day in New York. Asia, however, was mostly in the red, with Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Wellington and Taipei in retreat. Seoul, Manila and Jakarta bucked the trend. The main focus of attention Wednesday is the upcoming earnings from Nvidia, the world's most expensive listed company and market darling. The company has rocketed 200 percent this year -- and an eye-watering 2,670 in the past five years -- on the back of an unprecedented surge in demand for all things linked to artificial intelligence. There are hopes it will live up to expectations and provide some insight into its new chips. The firm's shares rose nearly five percent on Tuesday. "Nvidia's earnings will serve as a major test, given its status as the largest company by market cap and a cornerstone of the AI revolution," said Charu Chanana, chief investment strategist at Saxo Markets. "The central question: Is the AI theme robust enough to sustain investor enthusiasm, or is it on shaky ground." Finalto.com's Neil Wilson said investors will be "hungry for guidance on the new chips". "Nvidia's Blackwell chip should become available in the first quarter of next year and could bring in between $5 billion and $8 billion, according to (investment bank) Piper Sandler," he said. Bitcoin was sitting around the $92,000 mark after hitting a new all-time peak above 94,031 on Tuesday. West Texas Intermediate: UP 0.2 percent at $69.53 per barrel

Asian markets struggle as traders weigh geopolitical tensions

Hong Kong, Nov 20, 2024 (AFP) - Asian investors struggled Wednesday to track a positive lead from Wall Street as they assess the prospect of an escalation in the Russia-Ukraine war, Donald Trump's second presidency and the outlook for US interest rates. They were also keenly awaiting the release of earnings from chip behemoth Nvidia later in the day, which many see as a bellwether of the tech sector and AI demand that have helped power markets to multiple record highs this year. Traders were treading carefully this week amid uncertainty after Trump's re-election and as he picks his cabinet, with several China hawks up for key positions fanning worries of another trade war between the economic superpowers. The tycoon has pledged to ramp up tariffs on imports, with China particularly in his sights, but observers warn that such a move -- along with planned tax cuts -- could relight still stubborn inflation. That has dampened hopes for several Federal Reserve interest rate cuts next year. Meanwhile, the war in Ukraine has burst back into the thoughts of traders as Moscow vowed to react "accordingly" after saying Kyiv had fired its first US-made long-range missile into Russian territory. Washington this week said it had cleared Kyiv to use the US-supplied Army Tactical Missile System against military targets inside Russia -- a long-standing Ukrainian request. Russian Foreign Minister Sergei Lavrov said the attack showed Western countries wanted to "escalate" the conflict, adding that "we will be taking this as a qualitatively new phase of the Western war against Russia". President Vladimir Putin signed a decree Tuesday lowering the threshold for using nuclear weapons, which the White House, Britain and the European Union called "irresponsible". Growing worries that the war will ramp up to another, more dangerous level weighed on sentiment in Europe but the S&P 500 and Nasdaq rose for a second straight day in New York. Asia, however, was mostly in the red, with Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Wellington and Taipei in retreat. Seoul, Manila and Jakarta bucked the trend. The main focus of attention Wednesday is the upcoming earnings from Nvidia, the world's most expensive listed company and market darling. The company has rocketed 200 percent this year -- and an eye-watering 2,670 in the past five years -- on the back of an unprecedented surge in demand for all things linked to artificial intelligence. There are hopes it will live up to expectations and provide some insight into its new chips. The firm's shares rose nearly five percent on Tuesday. "Nvidia's earnings will serve as a major test, given its status as the largest company by market cap and a cornerstone of the AI revolution," said Charu Chanana, chief investment strategist at Saxo Markets. "The central question: Is the AI theme robust enough to sustain investor enthusiasm, or is it on shaky ground." Finalto.com's Neil Wilson said investors will be "hungry for guidance on the new chips". "Nvidia's Blackwell chip should become available in the first quarter of next year and could bring in between $5 billion and $8 billion, according to (investment bank) Piper Sandler," he said. Bitcoin was sitting around the $92,000 mark after hitting a new all-time peak above 94,031 on Tuesday. Tokyo - Nikkei 225: Down 0.5% at 38,242.35 (Break) Hong Kong - Hang Seng Index: Down 0.1% at 19,640.50 Shanghai - Composite: Down 0.1% at 3,344.39 Euro/Dollar: Up at $1.0601 from $1.0599 on Tuesday Pound/Dollar: Up at $1.2690 from $1.2682 Dollar/Yen: Up at 154.85 Yen from 154.67 Yen Euro/Pound: Down at 83.52 Pence from 83.54 Pence West Texas Intermediate: Up 0.2% at $69.53 per Barrel Brent North Sea Crude: Down 0.2% at $73.20 per Barrel New York - Dow: Down 0.3% at 43,268.94 (Close) London - FTSE 100: Down 0.1% at 8,099.02 (Close)

Asian markets mixed as Nvidia falls short of hopes, eyes on Trump

Hong Kong (AFP) - Asian markets were mixed Thursday as another blockbuster earnings from chip titan Nvidia smashed forecasts but still left investors disappointed, while sentiment was also being swayed by geopolitical concerns. Bitcoin reached an all-time peak above $95,000 as it continued its run towards $100,000 on optimism that the incoming US president will usher in an era of deregulation for cryptocurrencies. All eyes had been on the release from Nvidia, which has been at the forefront of a global tech surge that has helped push some markets to multiple records owing to voracious demand for all things linked to artificial intelligence. And once again, the firm topped expectations, announcing Wednesday that it made a $19 billion profit on record high revenue in the July-September quarter, while sales reached $35.1 billion -- about $2 billion more than estimated. However, its shares fell in after-hours trade, even as chief executive Jensen Huang declared that the "age of AI is in full steam, propelling a global shift to Nvidia computing" and that its keenly anticipated Blackwell processing platform is in full production. Observers said investors had been hoping for an even bigger blowout report, with Bloomberg saying some had been hoping for sales of as much as $41 billion. Its shares -- which have soared more than 200 percent year to date -- dropped four percent at one point after-hours. With Nvidia now the world's most expensive listed company, its results have become a bellwether of the tech industry. "I have a feeling we've reached peak Nvidia," said Pendal Group's Amy Xie Patrick on Bloomberg Television. "This is a stock that beat analyst estimates but didn't beat enough." And SPI Asset Management's Stephen Innes added: "The bigger question remains: where exactly is the bar for Nvidia now? With expectations veiled in sky-high optimism, even seasoned analysts struggle to get a clear read. "With so many portfolios already brimming with Nvidia stock, some investors might see this quarter's results as a minor letdown." But he added: "Still, the strength of the numbers, paired with the pipeline of Blackwell chip orders, is enough to keep the dream alive." Markets in Asia were mixed in early trade, with Tokyo, Hong Kong, Shanghai, Sydney, Taipei and Manila in negative territory, while Singapore, Seoul, Wellington and Jakarta slipped. Bitcoin topped out at more than $95,004 as it continued its march to the $100,000 mark on expectations Donald Trump will push through measures to ease regulations on cryptocurrencies. It has surged almost 40 percent since the US election at the start of the month. Investors have also been spooked by developments in the Ukraine war after Russia said Kyiv had fired US-supplied missiles into the country. That was followed by reports that UK-supplied rockets had also been used. After Russian Foreign Minister Sergei Lavrov said earlier that the use of US missiles showed Western countries wanted to "escalate" the conflict, adding that "we will be taking this as a qualitatively new phase of the Western war against Russia". Russian President Vladimir Putin signed a decree Tuesday lowering the threshold for using nuclear weapons. Investors are also keeping watch on Trump's picks for his cabinet, with the fingering of China hawk Howard Lutnick for commerce secretary fuelling worries of another painful trade war. Lutnick has expressed support for a tariff level of 60 percent on Chinese goods, alongside a 10 percent tariff on all other imports. West Texas Intermediate: UP 0.5 percent at $69.11 per barrel

Stock markets retreat ahead of Nvidia earnings

London (AFP) - US and European stock markets retreated on Wednesday as investors eagerly awaited results from artificial-intelligence giant Nvidia. The dollar firmed against rivals as US president-elect Donald Trump works on completing his cabinet picks, the outlook for US interest rates and the prospect of an escalation in the Russia-Ukraine war. "One of the most highly anticipated days of the earnings season, if not the most, the Nvidia earnings day, is finally here," noted Ipek Ozkardeskaya, senior analyst at Swissquote Bank. Shares in US chip behemoth Nvidia fell 1.7 percent at the start of trading. The company releases its third-quarter earnings after US markets close. Many investors see the company as a bellwether for the tech sector and artificial-intelligence demand that have helped power Wall Street to multiple record-highs this year. "It is rare that a single stock dominates the global financial space, however, tonight's earnings report from Nvidia seems like a pivotal moment for global financial markets," said Kathleen Brooks, research director at XTB. "A stunning earnings report could reenergize the AI trade and the entire US stock market rally, however, a disappointing report could trigger risk-off sentiment," she added. Shares in Target plunged more than 20 percent at the open of trading after the retailer issued lacklustre results and disappointing guidance. Investors are treading carefully this week amid uncertainty after Trump's re-election and as he picks his cabinet, with several China hawks up for key positions fanning worries of another trade war between the economic superpowers. On Tuesday he named China hawk Howard Lutnick as commerce secretary and Wall Street is waiting on tenterhooks for news of his pick for treasury chief. Trump has pledged to ramp up tariffs on imports, with China particularly in his sights, but observers warn that such a move -- along with planned tax cuts -- could relight still stubborn inflation. That has dampened hopes for several interest-rate cuts next year from the US Federal Reserve. The war in Ukraine has also burst back into the thoughts of traders this week. Markets briefly slumped on Tuesday after President Vladimir Putin signed a decree lowering the threshold for using nuclear weapons. West Texas Intermediate: UP 0.7 percent at $69.72 per barrel