CAC 40: Nvidia 'disappointment' put into perspective

(CercleFinance.com) - The Paris Bourse is set to regain some ground in early trading on Thursday, despite the fact that Nvidia's quarterly results published last night did not totally convince investors.


At around 8:15 a.m., the 'future' contract on the CAC 40 index - December delivery - was up 28 points at 7242 points, suggesting a positive opening after two consecutive sessions of decline.

The American AI chip giant has largely exceeded Wall Street's expectations with its third-quarter accounts, thanks to strong demand for its 'Hopper' architecture, soon to be succeeded by the new 'Blackwell' platform.

"The AI era is turning full steam ahead", said Jensen Huang, founder and CEO of the Californian group, quoted in the processor manufacturer's press release.

Sales for the three months to the end of October jumped 94% year-on-year to $35.1 billion, with earnings per share (EPS) up 103% to $0.81.

By way of comparison, analysts were expecting average EPS of $0.70.

The stock was losing 2.5% in after-hours trading on the New York Stock Exchange, the victim of profit-taking after a gain of almost 195% this year.

In a note issued at the start of the week, Goldman Sachs strategists warned that valuations for the 'Magnificent Seven' were beginning to approach fair value, leading the investment bank to anticipate a softening of their outperformance relative to the rest of the market.

"In addition, the sales forecast for the fourth quarter came in at $37.5 billion, 'barely' above the consensus figure of $37.1 billion", added Jim Reid, market analyst at Deutsche Bank.

In addition to Nvidia's results, investors will have to digest a whole series of economic indicators over the course of today's trading session.

In the US, jobless claims, the Philadelphia Fed index and leading indicators from the Conference Board are on the menu.

Home sales, which in September reached their lowest level since 2010, are likely to remain held back by high property prices and borrowing rates that are only gradually coming down.

On the New York Stock Exchange, U.S. equity markets ended last night in disarray ahead of Nvidia's release, with the Dow Jones gaining 0.3% and the Nasdaq losing 0.1%.

As a result, the underperformance of European equities relative to their U.S. counterparts was further accentuated, with the Euro STOXX 50 losing almost 0.5%.

In a sign of the unease surrounding Europe, the Paris market ended Wednesday's session down 0.4% at 7198 points, after having spent the whole morning in the green.

'This illustrates rather well the skepticism of investors, against a backdrop of concern and uncertainty about geopolitical factors, the situation in Germany, the difficulties in the manufacturing industry and, more generally, the complicated structural outlook affecting Europe', say the teams at Danske Bank.

There seems to be no hope of any positive surprises on the Old Continent, even though economic data has been rather better than expected recently", the Danish bank points out.

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