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Nvidia (NVDA)
Nvidia is set to beat previous results when it publishes earnings on Wednesday. For the quarter, the chipmaker is expected to report adjusted earnings per share (EPS) of $0.65 on revenue of $28.7bn (£21.7bn). That works out to a 139% jump in EPS and a 113% increase in revenue compared to the same period a year ago when Nvidia saw EPS of $0.27 and revenue of $13.5bn.
Nvidia is the world leader in AI chip design and software, controlling between 80% and 95% of the market, according to Reuters. And it’s expected to continue to hold that lead as it begins rolling out its next-generation Blackwell line of chips.
The most anticipated results of the quarter will send ripple effects throughout the tech sector as investors look for signs that the AI trade will continue to dominate market conversations into the second half of the year.
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Nvidia stock is up more than 163% year to date and 60% in the last six months. Rival AMD’s (AMD) stock price is up 9% year to date and down some 14% over the last six months.
Nigel Green of deVere Group said: “The company has become the undisputed leader in artificial intelligence (AI) chips, a market segment that is poised to reshape industries across the globe. In a world increasingly dominated by AI-driven technologies, Nvidia stands head and shoulders above the competition.
“The company’s cutting-edge GPUs, particularly its Hopper architecture, are driving massive demand, and there is no clear competitor in sight that can match its performance.
“The result? A stratospheric rise in Nvidia’s stock and market cap that has far outpaced broader market gains.”
Miner BHP is set to boost copper production after its mainstay iron ore business suffered from China’s economic slowdown.
The FTSE 100 (^FTSE) group said it expects Chinese steel demand to remain depressed in 2024.
Consumption of iron ore has been hammered by a slowdown in China, where fewer buildings are being constructed, dampening demand for steelmaking iron ore. Almost two-thirds of BHP’s revenues come from iron ore, with under one-third coming from copper.
BHP chief executive Mike Henry said: “In the near term, we expect volatility in global commodity markets, with China experiencing an uneven recovery among its end-use sectors. The effectiveness of recently announced pro‑growth policies will be an important contributor for the country to achieve its official 5% growth target.”
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BHP’s revenue for the year ending in June rose 3% to $55.7bn, while underlying net profit grew 2% to $13.7bn.
However, its total profit attributable to shareholders fell 39% after a $2.7bn write down in the value of its Australian nickel operations, and a $3.8bn charge related to a dam collapse in Brazil.
The firm also cut its full-year dividend by 14% to $1.46 to reflect higher investment in new projects.
Shares were 1.5% higher at the time of writing.
Ryanair shares rose more than 6% on Tuesday after the airline’s boss Michael O’Leary said fare decreases will be limited to 5%, reassuring investors who had feared steeper reductions in prices.
Last month the biggest airline in Europe warned that fares could drop by more than 10% as it missed analyst estimates for sales. Shares in the airline plunged 15% last month on the back of the news.
The risk of what O’Leary at the time called an “ugly scenario” of double-digit falls in average fares “looks like it has disappeared.”
“While fares were kind of softening during April, May and June, that has levelled out,” he said.
Asked if Ryanair was still seeing price resistance when it tried to raise prices on last-minute fares, O’Leary said: “It’s not the same price resistance.”
Brent Crude oil (BZ=F)
Brent oil prices were steady on Tuesday, stabilising after three consecutive sessions of gains that saw prices climb roughly 7%.
Crude traded at about $81 a barrel after rising 7% in the sharpest three-day rally since April last year, while West Texas Intermediate was near $77.
“These gains were fuelled by expectations of interest rate cuts in the US, which became the dominant market narrative after the Federal Reserve chairman signalled an easing off of the monetary policy brakes,” said Ricardo Evangelista, senior analyst at ActivTrades.
“Jerome Powell hinted at a rate cut in September and left the door open for additional cuts before the year’s end, bolstering the outlook for economic growth and, consequently, oil demand.”
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“Meanwhile, in the Middle East, tensions remain high between Israel, Iran, and its proxies, raising the threat of an all-out war that could severely disrupt the global supply of crude.”
“Adding to supply concerns, the potential closure of oil fields in Libya could, if confirmed, remove more than a million barrels per day from an already tight market.”
“Against this backdrop, with pressures mounting from both the supply and demand sides, there may be room for further gains in oil prices.”
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