Equities Update: Nvidea, Auto Trader, Kingfisher, Pets at Home…

Nvidia reaffirms AI leadership with strong results

Josh Gilbert, market analyst at eToro says: “In a quarter of uncertainty, Nvidia has reminded markets why it is the cornerstone of the AI revolution with another solid result and upbeat forecast.

“Investors came into this quarter looking for signs that Nvidia could alleviate short-term concerns. What they got was a clear message that demand remains robust, Blackwell is ramping up fast and these results will restore investor confidence. Despite the China drag, Nvidia’s top-line strength speaks for itself with USD$44 billion in Q1 sales and another USD$45 billion expected next quarter tells us they’re making up for the China loss elsewhere. 

 “Artificial intelligence (AI) titan Nvidia appears to be absorbing the shock of Donald Trump’s investment restrictions on China – to an extent”

Garry White, Chief Investment Commentator at Charles Stanley, comments: “Artificial intelligence (AI) titan Nvidia appears to be absorbing the shock of Donald Trump’s investment restrictions on China – to an extent. Management provided second-quarter guidance that was a little shy of market expectations – with the revenue loss from Washington’s ban on its H20 chips to China expected to be as high as $8bn in the quarter. Clearly, the company faces a period of elevated political risk. Nevertheless, the results also showed that the long-term investment case in AI remains intact. Tech bros can relax.”

Despite bumps in the road, Auto Trader still in the driving seat

Mark Crouch, market analyst for eToro says: “Auto Trader has been something of a hidden gem for investors, though by now, the secret’s well and truly out. The online car marketplace posted an 8% rise in operating profit over the year, but shares stalled this morning after what many saw as an underwhelming earnings report.

“One of Auto Trader’s biggest advantages, beyond its slick new AI-powered Co-Driver tools, is the sheer lack of serious competition. As Warren Buffett famously said, a great business has a “moat” and Auto Trader certainly has that. With margins north of 60% and a market cap ten times that of its nearest rival, makes it the clear go-to destination for online car sales in the UK.

“The UK’s digital services tax has proved to be a bump in the road, however with that said, for long-term investors, it’s been a smooth ride, and with the company still firing on all cylinders, today’s dip may prove more of a pit stop than a sign of breakdown.”

Kingfisher a tariff haven for investors – Chris Beauchamp, Chief Market Analyst at global trading and investing platform IG.

“Another big focus was margins. Gross margin beat estimates, excluding the H20 impact, and that’s a big positive for progress into the 2nd half of the year when investors will expect to see margins move back into the mid-70% region. With profits soaring, Nvidia is creating a huge cash pile, jumping to USD$53.7 billion, up from USD$31.4 billion a year ago. That war chest gives the company the firepower to keep innovating through R&D, maintain its leadership at the forefront of AI and potentially even reward shareholders with buybacks or dividends.

“While sales in China are clouded by export restrictions, the Middle East looks set to become the new launchpad for Nvidia’s next phase of growth. Let’s be clear: the AI boom has many players, but Nvidia is the name that continues to set the pace.”

Tail of two halves for Pets at Home

Adam Vettese, market analyst at eToro says: “A ‘tail’ of two halves for Pets at Home this morning, as the retail side of the business continues to struggle due to tightened discretionary spending caused by the increased cost of living. As such, the purchases of new collars, beds or other toys and accessories are being scaled back from the family budget.

“Pets at home are putting their best paw forward with the veterinary side of the business, which is continuing to show robust growth. This has helped offset weaker retail performance and brought overall results in line with market expectations. Pre-tax profit and earnings per share rose, reflecting operational resilience despite a challenging macro environment.

“The board’s confidence is evident in the 1.6% dividend hike to 13.0p, signalling optimism for long-term growth. However, headwinds persist. Elevated costs, softer retail footfall, and the ongoing CMA probe into veterinary pricing practices continue to cloud the outlook.”