Before the bell: the world’s largest stock does not disappoint

Nvidia remains phenomenal. GBL and EQT dispose of their “children”. Strong results in Brussels.

Wednesday was a trading day that was once again more in line with the classic trend. The Europe Stoxx 600 index gained 0.7%. On Wall Street, the S&P 500 added 0.8% and the Nasdaq went one step further and climbed 1.3%, thanks to technology stocks returning to better form. After a long weak period, Microsoft gained 3% and IBM (+3.6%) recovered slightly from Tuesday’s blow. JPMorgan Chase & Co (+2.1%) and Visa (+1.9%) also recovered part of their losses following fears of a negative impact from artificial intelligence. Salesforce gained 3.4%, but the forecasts published after the close failed to convince. Spanish bank Santander (+4.7%) posted a record profit of 15.1 billion euro and aims to reach 20 billion by 2028. Investors also sent HSBC (The Hongkong and Shanghai Banking Corporation) 8% higher after the London-listed bank reported a profit of 29.9 billion dollar, mainly thanks to strong results in Hong Kong.

This morning, indices in Asia are trading little changed. Brussels is publishing a large batch of results today with Syensqo, UCB (better than expected), Argenx (strong), Bekaert, CMB.Tech, DEME, Shurgard and Qrf. Elsewhere investors are looking ahead to results from Stellantis, AXA, Schneider Electric, Engie, Baidu, Rolls-Royce and Aalberts.

Investors throw adopted children out

GBL announced yesterday that it has sold its last shares in Umicore. This fits into the course that the new management has mapped out for the Frère holding, in which many investments gathered by the former CEO/son-in-law are being monetised. Umicore briefly dropped but recovered so that only a small loss of 0.9% remained at the close. A fine performance, as the share had gained 8% on Tuesday while it had lost 6% on Monday. Daily movements on the stock market must more than ever be taken with a grain of salt. We are curious how long it will take before GBL will also monetise Ontex. A takeover by an industrial player is possible here. The value has fallen sharply. The same is true for Azelis (-4%), yet EQT decided to sell its last shares. EQT brought Azelis to the stock market and actually stayed invested for far too long, since EQT focuses on investments in unlisted companies. Once their “child” is listed, the job is done.

Nvidia remains remarkably strong

The results and outlook from Nvidia did not disappoint yesterday after the close. Fourth-quarter revenue rose by 73% to 68.1 billion dollar, more than 2.2 billion above analysts’ expectations. For the current quarter, CEO Jensen Huang expects revenue of 78 billion dollar, a solid 5.2 billion more than the consensus forecast. The bulk of revenue comes from chips for AI applications. Revenue from gaming and visualisation, the company’s original activity, accounts for less than 10% of the revenue from data centre chips. Nvidia has chips ready that can reduce users’ energy costs by a factor of ten, Huang said. Over the full financial year, the company generated 215.9 billion dollar in revenue (+65%). More than half of that (!) remained as net profit, or 120 billion dollar (+67%). That equals 4.90 dollar per share. Analysts expect earnings of around 8.00 dollar per share this year. That would value the stock at 24 times expected earnings. After the close the stock gained only about 2%.

Did you know…

that the Arnault family increased its stake in luxury group LVMH to above 50%? This emerged from a filing with the French stock market regulator in Paris.

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