Beyond the central bank meetings or even the United States elections themselves, another of the events that has been marking market movements has been the presentation of Nvidia results. This Wednesday, the chip manufacturer put the final touch on the publication of the company’s accounts. the Magnificent Seven. These companies end the third quarter of the year improving their profits by 32% year-on-year on average.
Nvidia’s results They have been able to alter the tone not only of Wall Street, but of the rest of the world’s major indices. The US market is sustaining its strong rise in the year and the growth of its profits in this group of companies, led by this undisputed queen. In each quarterly meeting, fear flies over investors who fear that the fever for Artificial Intelligence has gone too far and a potential bubble has been generated around the technology. That is why, as a champion of this new technological revolution, That Nvidia continues to beat its own figures and the experts’ estimates is more than key.
In this latest earnings report, Nvidia once again beat analyst forecasts in virtually all major metrics. The net profits of the American giant have exceeded 19.3 billion dollars, 10% more than the almost 17.5 billion predicted by experts. This is the company’s highest profit figure in a quarter in its entire history. “Profits for the quarter reached $19.3 billion. To give you an idea of the magnitude of this figure, Nvidia only generated revenue of $16.6 billion in 2021. That underlines the astonishing pace of growth it has experienced in the past few years. recent years and it would be absurd to bet against Jensen Huang [CEO de la compañía] and his team in the midst of this AI revolution,” they explain from eToro. Revenues have surprised the market by up to 5.5% and have exceeded $35 billion. Earnings per share in the quarter have reached 0. $78 per share, compared to the estimated $0.72.
But the fact that this company presents figures above projections is not enough for the market either. Precisely, Its gross margin was 0.6% below estimates and it has been this factor, together with the company’s own sales forecast for its last quarter, that has led investors to undo positions in the value and this Wednesday Nvidia fell on the stock market by over 2% at the European close.
The production and engineering costs of the new chip saga, Blackwell, will affect profit margins. Thus, for the next quarter, Huang placed Nvidia’s gross margin at 73%. “Gross margin is expected to decline to 70 points in the fourth quarter and the first half as Blackwell generates lower margins, although it could recover to 70 points in the second half, once the GPU [unidades de procesamiento gráfico] is totally ready,” they pointed out from Bloomberg Intelligence.
But, although investors and experts look under the rocks for what Nvidia’s weaknesses may be, the growth history of its business is unstoppable. Those 19.3 billion dollars of profit represent improve the figure year-on-year up to 109%. For the whole of 2024, analysts expect the figure to exceed 69.1 billion euros. This data implies a return to more than doubling the already historic figure of 2023 (see graph).
Another thing that Nvidia makes clear is that none of the other Magnificent Seven can keep up with him. The next company in this group that has improved its profits the most this quarter is Amazon, with year-on-year earnings growth of 55%. From May to August, the company founded by Jeff Bezos recorded profits of almost 15.33 billion euros. For the year as a whole, analysts expect the profit figure to be 80% higher than the previous year, approaching $55 billion.
Of 35% and 34% are the improvements in the profits of Meta and Alphabet (parent of Google) respectively compared to those presented in the same period of the previous year. “In the third quarter 2024 earnings call, Mark Zuckerberg [CEO] and Susan Li [CFO] They highlighted the growth and development of Meta AI, which has reached 500 million monthly active users and is emerging as one of the most popular AI assistants. This advance, along with a constant investment in servers and data centers, underlines Meta’s commitment to the infrastructure necessary to support the demand for generative AI,” they explain from Punto Research. For their part, for Alphabet, Josh Gilbert, analyst at eToro market, highlights from its results that “all key segments have exceeded expectations, demonstrating precisely why the company is rated great. Alphabet is a money-making machine, and its growth is impressive. “Strong earnings from the rest of the Magnificent Seven, like these results from Alphabet, will keep these stocks rising through the end of the year.”
Tesla kicked off the presentation of results of these big tech companies and he did it, furthermore, giving a major surprise to the market, to the place its profits in the quarter 17% above the levels of the previous year. However, the weakness in demand for electric cars, added to the strong Chinese competition, which has led the company to have to lower the prices of its models, will end up having an impact on the annual results statement in which it is expected that Profits contracted by 52% compared to the previous year.
Up to 11% surprise generated the profits presented by Microsoft. The company published its figures for the first quarter of its fiscal year and its profits were close to $24.7 billion.
Finally, only Apple has presented a contraction in its quarterly profits year-on-yearplacing them up to 36% below those obtained in the same period of the previous year, mainly weighed down by a significant drop in sales in China. However, for the year as a whole, experts continue to expect that the apple company will join Aramco and this year will be the second company in the world to record profits of more than $100 billion.
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