Markets Defused is an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- Can Nvidia keep meeting the market’s high expectations?
- UK energy bills will rise again in October
- Nestle shares rally in US trade after CEO exit news
- Workday shares end work week strongly
Can Nvidia keep meeting the market’s high expectations?
NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) speculators were this week positioning ahead of Wednesday's second-quarter earnings report.
AI-related demand for high-powered processors, the kinds that Nvidia specialises in, has been the factor in the chip-maker's emergence as ‘the world’s biggest’ company, with a market capitalisation above $3 trillion.
Throughout its rise - 170% this past year alone – investors have come to expect big numbers as these quarterly earnings reports come along.
It remains to be seen whether the AI bandwagon can keep motoring ahead at the pace that investors have become accustomed to.
Analysts on Wall Street remain optimistic, or at least they do in the preview reports they publish, with many expecting Nvidia to exceed earnings forecasts due to the sustained demand for its AI processors.
The likes of Citi and Goldman recently repeated 'buy' ratings for the share - and, in aggregate a total of 66 stock analyst see it that way, whilst eight others have it as a 'hold' and none see the stock as a 'sell'.
Nvidia’s own guidance for quarterly revenue is pitched at an eyewatering $28 billion, whilst the consensus analyst forecast, according to Zacks Investment Research, is slightly higher at $28.24 billion – which, if realised is more than double the total a year ago.
Earnings per shares is modelled at 0.63 cents per share, according to analyst consensus compiled by Zacks.
UK energy bills will rise again in October
British households are facing a winter of higher energy bills after UK regulator Ofgem confirmed on Friday that the ‘price cap’ would rise by 10% from October.
It means that the average UK annual dual-fuel energy bill will increase to £1,717, up from £1,568.
This hike is primarily driven by rising wholesale gas prices due to geopolitical tensions and extreme weather events, Ofgem said.
The regulator reviews the energy price cap every three months and sets a maximum limit on what suppliers can charge per unit.
This winter’s cap is lower than last year's peak, but it is still substantially above the levels seen before the energy crisis that followed the war in Ukraine.
Consumer advocates encouraged energy customers to explore fixed-rate energy deals, meanwhile, the regulator also advised consumers to ensure they are receiving all available benefits, particularly pension credit, to help manage energy costs.
The exact amount that households bills increase by will vary depending on energy usage, location, and the payment method they use.
Nestle S.A. (OTC:NSRGF, VTX:NESN)es rally in US trade after CEO exit news
Nestle S.A. (OTC:NSRGF, VTX:NESN) ADR shares, on the OTC market in the US, advanced more than 5% after the announcement of a leadership reshuffle – which sees the exit of chief executive Mark Schneider by 1 September.
Schneider departs after eight years at the confectionary giant, and he will be succeeded by Laurent Freixe.
The new boss steps up having run Nestle’s operations in Latin America.
It comes after Nestlé has been struggling with slowing sales and a declining share price, which is down nearly 10% for the year to date.
Some analyst comments featuring in media coverage cite Freixe’s deep experience within the company and say he’s well-suited to address current challenges, while others express caution, noting the potential need for further strategic adjustments.
Workday shares end week strongly thanks to expectation-beating results
Workday Inc (NASDAQ:WDAY) shares were up 12.5% in Friday’s deals driven by last night’s upbeat financial results.
Revenue for the second quarter reached $2.09 billion, which was slightly above the forecasted $2.08 billion – with subscription services revenue of $1.9 billion contributing most of that total.
Earnings (adjusted) per share similarly beat expectations at $1.75 versus $1.66.
Looking ahead, Workday stuck to a positive full-year forecast for subscription revenue, seen between $7.7 billion to $7.73 billion.
Rewarding shareholders it also announced a $1 billion share buyback plan.
In terms of narrative, Workday highlighted its use of artificial intelligence as part of its strategy to drive long-term growth and profitability.
In New York, Workday shares were up $28.99 or 12.55% at $260.08.