Why Nvidia's upcoming earnings are crucial for the market. Picture Getty
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The ASX is poised to open lower on Wednesday, in line with Wall Street. At 8am AEDT, the ASX 200 index futures contract was pointing down by -0.3%.
Overnight, the S&P 500 fell by -0.60%. The blue chips Dow Jones index was down by -0.17%, and the tech-heavy Nasdaq tumbled by -0.92%.
Earnings are still front of mind. Traders are on edge ahead of Nvidia Corp’s much anticipated results release later today. Short dated options on the stock show that it will move by 10% on Thursday morning US time.
Nvidia and the other members of the Magnificent Seven have become an integral part of the US stock market.
“If Nvidia reports estimates in line with consensus, the Magnificent 7 will have grown sales by 15% year/year and lifted margins by 582 basis points year/year, leading to earnings growth of 58%.
“In contrast, the remaining 493 stocks in the S&P 500 grew sales by 3% year/year while margins contracted by 56 basis points and earnings fell by 2%,” said a note from Goldman Sachs.
Walmart’s shares meanwhile rose +3% to a record high after the retailer’s sales and earnings per share came in above analysts’s estimates.
Home Depot was flat despite Q4 sales decline and a weak guidance.
Microchip stocks however struggled, with Super Micro Computer falling -2% and market darling Advanced Micro Devices by almost -5%.
Capital One said it’s buying Discover Financial Services in a US$35.3 billion megadeal.
While one company doesn’t make or break a market, the growing influence of Nvidia on the emerging AI sector should be closely watched.
Analysts are calling Nvidia’s earnings the most important this season.
“Any signs that the AI boom may be slowing could lead to a big bearish reversal in the stock, so traders are justifiably on tenterhooks ahead of the release,” said Matthew Weller at Forex.com and City Index.
Expectations are for a record-breaking revenue and EPS growth due to the strong AI demand. But what investors will keenly watch is Nvidia’s guidance, to see how far the demand for AI will continue.
Some experts however are not too optimistic.
“It has become a check-the-box stock,” said Cathie Wood on a podcast with the The Wall Street Journal.
“It’s surprising hugely on the high side of expectations. And we do think that expectations could be getting ahead of themselves,” Wood said.
Gold price rose by +0.30% to US$2,023.87 an ounce.
Oil prices were down -1.5%, with Brent now trading at US$82.47 a barrel.
The benchmark 10-year US Treasury yield dipped by 5 basis points (bond prices higher) to 4.27%.
Iron ore futures slumped by -5% US$120.85 a tonne.
The Aussie dollar inched higher by +0.15% to US65.48c.
Meanwhile, Bitcoin rose by +0.75% in the last 24 hours to US$52,102.
Camplify (ASX:CHL)
For the half, Camplify reported revenue growth of 95.4% vs pcp to $24.3m. This was on the back of a 59% increase in total bookings to 44,782. Camplify closes H1 with $26m in future bookings, excluding PaulCamper bookings and excluding TAP, up from $23.7m in the pcp.
Laramide Resources (ASX:LAM)
LAM announced assay results received from the 2023 drilling campaign at the Huarabagoo deposit at the Westmoreland Project in NW Qld. All 13 holes intercepted multiple zones of mineralisation (>100ppm U3O8), with some zones displaying grades exceeding 1.0% U3O8. The uranium mineralisation is hosted in the Westmoreland sandstone unit adjacent to the intrusive mafic Redtree dyke system.
Askari Metals (ASX:AS2)
Askari has acquired 100% ownership of Matemanga Uranium Project (under application), spanning more than 260km2 in highly prospective area of Tanzania. An extensive review of available data identified significant radiometric anomaly measuring 10km by 6km, reinforcing exploration potential for uranium. Matemanga is located less than 220km southeast of the Kayelekera Uranium Project (Malawi), owned by Lotus Resources (ASX:LOT).
Veris (ASX:VRS)
Veris announced some key contract wins across the business nationally. Veris secured a $1 million contract to provide engineering surveys for the Rail Revitalisation Program in WA. The company has also won a further $5.2 million in new project work across the infrastructure, property, mining, government & defence sectors. Veris’ secured forward workload is in excess of $60 million for the next 12 months.
Raiden Resources (ASX:RDN)
The metals explorer said results of the Induced Polarisation (IP) orientation survey at the Mt Sholl Project concluded that anomalies correlate with Raiden’s modelled JORC Exploration Target mineralisation extensions. Anomalies defined through this survey have not been drill tested, and represent a significant potential for definition of further mineralisation.
At Stockhead we tell it like it is. While Raiden Resources is a Stockhead advertiser, it did not sponsor this article.
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