Mixed picture: Nvidia down, European tech up
STOXX 600 up 0.7%
Tech stocks rise
Spirits makers surge
Wall St futures higher
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MIXED PICTURE: NVIDIA DOWN, EUROPEAN TECH UP
Nvidia NVDA.O shares have rebounded from their Thursday after-hours 7% decline and are down 1.8% in premarket trading as traders try to get a grip on the implications of its forecasts which initiallydisappointed investors.
Meanwhile European tech is the best performing sector today, up 1.8, with chip stocks doing even better. The Netherland's ASML .ASML is rising 2.9%, German chipmaker Infineon IFXGn.DE is up 1.5% and STMicro STMPA.PA is adding 2.6%.
Along with some sanguine analyst reactions, they reveal a more nuanced reaction to Nvidia's results.
Bank of America analysts for example have reiterated their 'Buy' rating on Nvidia - "Unique growth at very reasonable valuation, ignore quarterly noise," they say.
Morningstar also said it sees no signs of an AI slowdown.
"Our confidence in Nvidia remains, as the company is still prospering from insatiable demand for graphics processors, or GPU, and related products used in data centers to run artificial intelligence," they wrote.
But they add that Nvidia’s earnings beat wasn’t as eyepopping as in quarters past, something Morningstar says may explain why shares fell after hours.
Dan Coatsworth, investment analyst at AJ Bell reflected on how investors may be digesting results, pointing out that the top end of analysts' forecasts was $0.71 earnings per share compared to the $0.68 earnings per share which the company achieved.
"It looks like investors might not have taken the average of analyst forecasts to be the benchmark for Nvidia’s performance, instead they’ve taken the highest end of the estimate range to be the hurdle to clear," wrote Coatsworth in a note.
(Lucy Raitano)
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NVIDIA WATCH PARTY OVER, BACK TO INFLATION VIGILCLICK HERE
Historical investor reaction to Nvidia results https://reut.rs/3Xkoqbm
European equities rise, Wall St futures soft https://reut.rs/4dDD96Y
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