Before the Bell: Nvidia Does Even Better Than Expected

The quarterly results of one American tech giant are setting the tone for markets today. Meanwhile in Denmark, NKT shows that electrification remains a key investment theme.

In the run-up to Nvidia’s earnings, markets struggled to find direction. The U.S. S&P 500 and Nasdaq gained 0,4% and 0,6% respectively. A typical European stock rose 0,1%. Belgium’s Bel20 outperformed with a 0,4% gain. Umicore (+3%) and Lotus Bakeries (+2,9%) led the Brussels index, while Montea (-2,6%) gave back some of Tuesday’s speculative gains. In Frankfurt, BASF (+2,9%) and ASML (+2,4%) stood out. Shares of the Dutch chip-equipment maker are set to rise further today on the back of Nvidia’s spectacular results. The positive news from the world’s largest chip designer is dominating markets this morning. Nvidia’s revenue rose 62% from the same quarter last year and 22% from the previous quarter. And there’s more: the current-quarter guidance also exceeded expectations. Anyone who confidently claimed that AI was a bubble now faces an inconvenient truth — or must admit that, if it is a bubble, it certainly hasn’t burst yet.

This morning in Asia, Hong Kong’s Hang Seng Index is down 0,4%. Japan’s Topix jumps 1,7%, helped by strong gains in the local chip sector. Chip-testing specialist Advantest surged 8,8%, while peer Lasertec gained 6,2% in Tokyo. In Belgium, we’ll soon receive half-year results from Gimv. In the U.S., Walmart, Warner Music Group, Intuit and Elastic NV are reporting. On the macro front, Belgium and Europe release consumer sentiment data, while the delayed U.S. September jobs report is finally due after the government shutdown.

Alive and Kicking

Investors watched nervously last night as Nvidia reported. “Make-or-break,” many said. But the world’s most valuable company hardly flinched. Nvidia once again beat expectations. Third-quarter revenue reached 57 billion dollar, up 62% from a year earlier and well above the 55 billion dollar analysts had forecast. Nvidia only guides one quarter ahead — and even that outlook came in above expectations, with projected revenue of 65 billion dollar. As the largest seller of AI chips, Nvidia is seen as the “canary in the coal mine” for the entire sector. That canary is very much alive. Pressure on AI stocks had been apparent in recent weeks, but we expect several names to bounce today. Nvidia’s stock was already up 5% in after-hours trading.

Well-Wired

Things are also moving quickly at NKT. The Danish power cable manufacturer posted quarterly revenue of 726 million euro, up 11% year-on-year. Net profit rose 17,5% to 67 million euro. At Spaarvarkens, we’ve long noted that the global need for more energy drives demand for cables and pipelines. In fact, NKT’s demand surged so sharply that it faced capacity constraints — but it is now well underway to expanding that capacity. Orders continue to flow in, bringing the order book to 10,4 billion euro. NKT will help build the Eastern Green Link 3 — a cable connecting Scotland and England — and the Bornholm Energy Island, which will link offshore wind farms to Denmark and Germany. The company confirmed its 2025 outlook, expecting results to come in at the upper end of the revenue range. It also introduced a strategic plan targeting annual organic revenue growth of more than 7% through 2030. Investors loved it: NKT shares jumped more than 17% yesterday.

Did you know…

that the White House has asked Congress not to tighten export restrictions on AI chips sold to China — including Nvidia’s? In the short run, that could provide yet another boost to the AI sector.

This article was translated from Dutch and was originally published on Spaarvarkens.be.