London pre-open: Stocks seen up after Nvidia beats expectations

by | Aug 24, 2023

(Sharecast News) – London stocks were set to rise at the open on Thursday following a positive session on Wall Street, as investors cheered better-than-expected results from US chip designer Nvidia.
The FTSE 100 was called to open 24 points higher at 7,344.

CMC Markets analyst Michael Hewson said: “Back in Q1 when Nvidia set out its revenue guidance for Q2 there was astonishment at the extent of the upgrade to $11bn. This was a huge increase on its Q2 numbers of previous years, or any other quarter, with the upgrade being driven by expectations of a big increase in sales of data centre chips, along with investments in Artificial Intelligence.

“Last night Nvidia crushed these estimates with revenues of $13.5bn, datacentre revenue alone accounting for $10.3bn of that total, a 171% increase from a year ago. For comparison, in Q1 datacentre revenue accounted for $4.3bn.

“Gross margins also beat expectations, coming in at 71.2% as profits crushed forecasts at $2.70 a share. Nvidia went on to project Q3 revenues of $16bn, plus or minus 2%.

“The company also approved an extra $25bn in share buybacks, with the shares soaring above this week’s record highs in after-hours trading, with the big test being whether we’ll see those gains sustained when US markets reopen later today.

“On the back of last night’s positive finish, as well as the exuberance generated by the belief that interest rate hike pauses are coming next month, European markets look set to open higher later this morning.”

Investors were eying the release of US initial jobless claims at 1330 BST, and the start of the Jackson Hole symposium in Wyoming, in particular a speech by US Federal Reserve chair Jerome Powell.

In corporate news, Intertek said it had bought US-based PlayerLync Holdings for an undisclosed sum.

PlayerLync provides an app-based service for companies that combines mobile learning, operational support and compliance, content management and people engagement, Intertek said.

Recruitment firm Hays raised its full-year dividend and announced a £36m special payout to shareholders despite reporting a drop in annual profits.

Operating profit was down 6% at £197m, as a record performance in Germany was outweighed by tough markets in the UK and Ireland, Australia and New Zealand.

Nevertheless, the company saw cash generated by operations rise 9% to £199.3m, allowed it to up its final dividend by 5% to 3p a share and announce a further 2.24p return.

Related articles

Latest Articles

Shore Capital hails impressive first half from JD Sports

Shore Capital hails impressive first half from JD Sports

(Sharecast News) - Shares in JD Sports Fashion surged on Thursday morning after the sportswear retailer beat forecasts with its interim results, with broker Shore Capital hailing "significant progress" as it reiterated its 'buy' rating on the stock. Pre-tax profit...

Time for Japan to act (II): State Street Global Markets

Time for Japan to act (II): State Street Global Markets

Written by Michael Metcalfe, Head of Macro Strategy, State Street Global Markets  Writing ahead of the September BoJ gathering in 2022, we argued in Time for Japan to act (first edition!) that the authorities should begin monetary tightening both through moving the...

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

(Sharecast News) - European stocks opened in the red on Thursday after hawkish comments from the US Federal Reserve on future rate rises dampened sentiment and investors turned their attention to the Bank of England's own policy meeting. The pan-European Stoxx 600...

Capita signs two new contracts worth £565m

Capita signs two new contracts worth £565m

(Sharecast News) - Outsourcing group Capita said it has signed two new contracts with the UK and Northern Ireland governments worth a combined £565m. Four months after Capita was selected as the preferred bidder, the group has now confirmed it has sealed the deal to...

Rise in UK borrowing limits Hunt’s scope for tax cuts

Rise in UK borrowing limits Hunt’s scope for tax cuts

(Sharecast News) - Britain's budget deficit in August was slightly higher than expected, according to official data published on Thursday, meaning Finance Minister Jeremy Hunt will have less scope for tax cuts ahead of the General Election. Public sector net borrowing...

Join our mailing list

Subscribe to our mailing list to receive regular updates!

No Fields Found.