Equities Update: Nvidia, Hunting, Grafton…

Nvidia continues to dominate the AI sector

Josh Gilbert, Market Analyst at investment platform eToro, says: “When you’re dubbed as the most important stock on the planet, you’ve got to deliver, and Nvidia has done exactly that once again, beating expectations across the board and showing that demand for AI remains solid. 

“Revenue jumped 122% year-over-year to $30.04 billion, and its data centre revenue grew 154% to $26.3 billion, both smashing through estimates. Nvidia also announced an additional $50 billion buyback program, signalling its confidence in what’s ahead after ending the quarter with a massive cash balance of $34.8 billion.

“What CEO Jensen Huang and his team are doing at Nvidia is nothing short of outstanding. They’re taking full advantage of the AI revolution and continuing to deliver every single quarter. The world’s biggest tech names are spending big. Meta, Microsoft and Alphabet are all growing their capital expenditures and that cash is going straight to Nvidia because they’re the best in the business. 

“Its outlook once again beat expectations, and after concerns that there may be delays, however, it foresees several billions of dollars in revenue from its new Blackwell chips. The market may be disappointed not to see a bigger beat on its outlook given what is now almost unattainable expectations, but the bottom line here is that the long-term story remains intact, demand remains huge and the Juggernaut that is Nvidia rolls on.“

Hunting PLC hikes dividend following a stellar performance

Mark Crouch, Market Analyst at investment platform eToro, says: “Hunting PLC has made excellent progress in 2024. A significant jump in revenues, profits, and a growing order book mean Hunting has upped its dividend by 10%, while the engineering group’s gross margin has also increased to a very healthy 27%. 

“The energy service industry has proven to be a tough nut to crack in recent years, with project inefficiency and spiralling debt becoming a regular occurrence for smaller operators. Hunting though seems to have carved out a niche, offering oil and gas producers valuable oil recovery technology, optimising performance and efficiency for producers. 

“With operations spanning over four continents, Hunting is well diversified in an industry that is notoriously volatile and the competitive nature of the industry makes its business model and execution all the more impressive.”

Tough market for Grafton as consumers watch their spend

Adam Vettese, Market Analyst at investment platform eToro, says: “It has been a challenging first half for Grafton with profits slipping on last year, with the Irish building materials supplier seeing weakness outside of its home market. Consumers may recognise the firm in the UK in the form of Selco Builders Warehouse, which has seen sales affected by cost-conscious consumers spending less on home improvements and DIY during uncertain times. 

“Grafton also supplies the new build market and with Labour’s pledge of new housing, the outlook could well improve should this policy come to fruition. 

“Management seems upbeat about prospects despite the first half performance citing the important autumn season ahead, and has raised the dividend and announced further buybacks.

“Investors will be hoping that revenue gets back on track to propel the shares back towards their post covid record around 40% higher than where we are now.“

Nikos Tzabouras, Senior Financial Editorial Writer at Tradu commented:

“Nvidia blew past estimates with record top and bottom lines, driven by strong demand for its AI infrastructure and executives forecast new record sales this quarter. However, the nearly 80% y/y projected expansion means further deceleration and a notable departure from the recent triple-digit growth rates.

“The results come at a period when AI scepticism has taken hold and markets are in a show-me mode as other AI darlings have failed to exhibit return of investment. Nvidia’s underwhelming guidance and slower Blackwell rollout, play into these fears and the stock dropped after-hours. This may cause headwinds for Wall Street, whose rally is fuelled by Nvidia and AI, but Fed rate cut euphoria can sustain the momentum.”