Nail biting ahead of Nvidia's numbers
Main U.S. indexes little changed
Tech leads S&P 500 sector gainers; Energy down most
Euro STOXX 600 index off ~0.5%
Dollar, bitcoin rise; gold off >1%, crude off <1%
U.S. 10-Year Treasury yield edges up to ~4.42%
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NAIL BITING AHEAD OF NVIDIA'S NUMBERS
It seems as if the global equity markets have been collectively holding their breath for Nvidia's NVDA.O quarterly numbers due after the closing bell today.
Indeed, the S&P 500 index .SPX is now on pace to post a whopping rolling 5-day gain of around 0.2% heading into NVDA's report.
Mike O'Rourke, chief market strategist at Jones Trading, is recounting that it was a year ago when Nvidia's dominant position in AI chips began to ramp up and materialized in its earnings releases.
"At the time, Q1 revenues only exceeded forecasts by 10.4%, but the company guided Q2 revenues 53% above the consensus estimate. The shares were up more than 100% year to date going into that earnings release, and are up another 210% since that release," writes O'Rourke in a note.
O'Rourke says there was a hiccup on Tuesday when an article in the FT raised the concern that some customers could potentially delay spending until NVDA's highly anticipated Blackwell chips start to ship in Q4.
To this, O'Rourke says that investors are well aware that a dearth of chips has been a major catalyst driving AI related chip stocks higher.
Therefore, he thinks it would be odd to see cancellations and delays emerge this early considering how hard it has been to get chips, and most of the mega cap tech companies who have reported earnings stated that they plan to spend.
NVDA shares took an early hit on Tuesday, but recovered and ended up around 0.6%.
O'Rourke's feeling is that if Nvidia is seeing customers delay spending there will be attempts to explain it away by noting that Nvidia will get those sales in Q4 when Blackwell ultimately ships.
"Although that would explain the customer behavior, it would still be a major negative since it signals AI chip demand has shifted from inelastic to elastic pretty quickly. Furthermore, it would be disastrous for Nvidia's competitors who would be left even further behind," O'Rourke writes.
On Wednesday, NVDA is off about 0.8% at around $946.
(Terence Gabriel)
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FOR WEDNESDAY'S EARLIER LIVE MARKER POSTS:
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BENCHMARK TREASURY YIELD PUSHES HIGHER AHEAD OF FED MINUTES - CLICK HERE
SERVICES TO BLAME AS UK INFLATION STAYS HOT - CLICK HERE
UTILITIES: WHAT A DIFFERENCE A MONTH MAKES! - CLICK HERE
BANKS: WHEN RATE CUTS COME, SO WILL PROFIT-TAKING - CLICK HERE
WHY US YIELDS CAN GO BACK TO RECENT HIGHS... OR BEYOND - CLICK HERE
STOXX STUMBLES AS AUTOS DRAG - CLICK HERE
STOXX FUTURES FLAT AS FTSE LAGS POST-CPI - CLICK HERE
NVIDIA VIGIL ALMOST OVER - CLICK HERE
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