Nvidia Corp. co-founder and CEO Jensen Huang holds up one of the company’s AI accelerator chips used in data centers while speaking at the Nvidia AI Summit Japan in Tokyo, Japan, Wednesday, Nov. 13, 2024.
Akio Chika | Bloomberg | Getty Images
This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Nvidia beats expectations, but shares fall
NVIDIA Third-quarter profit beat expectations, but shares fell 2.5% in after-hours trading. In the quarter ended October 27, the company’s revenue increased 94% year-over-year to $35.08 billion. Nvidia Chief Financial Officer Colette said demand for Nvidia’s next-generation chip, Blackwell, “is expected to exceed supply in several quarters of fiscal 2026.”
Adani charged with fraud in New York
Indian billionaire Gautam Adani, President of India adani groupHe was indicted along with others in federal court in New York on charges related to the bribery and fraud scheme, authorities said Wednesday. Adani and other defendants are accused in the indictment of paying more than $250 million in bribes to Indian government officials to secure solar supply contracts worth more than $2 billion in profits.
Dow breaks losing streak
U.S. markets were mixed on Wednesday ahead of Nvidia’s after-hours earnings report. this S&P 500 Index It’s flat, Dow Jones Industrial Average rose 0.32%, breaking four consecutive declines Nasdaq Index down 0.11%. European Stoke 600 Little has changed, with the European Central Bank warning that the biggest economic threat to the euro zone is no longer high inflation, but weak growth.
UK inflation surges higher in October
Inflation remains a thorny issue for the UK. Data from the British Office for National Statistics showed that on an annual basis, prices rose by 2.3% in October, significantly higher than the 1.7% increase in September. Economists polled by Reuters expected the October figure to be 2.2%. The data reduced the likelihood of a rate cut by the Bank of England in December.
(PRO) 10-Year Treasury Yield Could Hinder Stock Markets
The rate of return is 10 Year Treasury Bill It was 4.402%, significantly higher than the 3.6% hovering in September. Strategists said if yields breached the psychological level of 4.5%, it would put pressure on stocks.
bottom line
There is a concept in psychology called the “hedonic treadmill.” The theory is that as people achieve success, their expectations rise. Therefore, people need to continuously strengthen and improve to feel the same level of happiness as they initially did.
NVIDIA Seems to be a victim of this concept. The chipmaker’s third-quarter revenue and net profit did not disappoint compared with expectations of analysts polled by London Stock Exchange Group (LSEG).
For the current quarter, analysts forecast sales of $37.08 billion. The chipmaker expects sales to be about $400 million higher.
Still, Nvidia shares fell about 2.5% in after-hours trading.
Investors will likely focus on Nvidia’s rate of digital growth compared to past performance, not just whether it beats expectations.
CNBC’s Kif Leswing pointed out that although Nvidia’s third-quarter revenue increased by 94% annually, it was still lower than Nvidia’s growth rate in the first three quarters, when sales grew by 122%, 262%, and 265% respectively.
So does Nvidia’s forward guidance: sales are up about 70% this quarter compared with the same period last year. Bring out the champagne? No.
Aswath Damodaran, a finance professor at New York University’s Stern School of Business, told CNBC that the fact that Nvidia shares fell in after-hours trading after such a stellar report “tells you that people How much the anticipation game has heated up for Nvidia”.
“Not only do they have to beat analysts’ expectations, they have to beat analysts’ expectations by 10%.”
It looks like investors have been enjoying Nvidia’s impressive performance for so long, but they’ve become numb to it. Maybe it’s time to get off the treadmill?
—CNBC’s Kif Leswing, Samantha Subin and Brian Evans contributed to this report.
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