Nvidia reasserts its place in the Magnificent 7; Equity update

Nvidia reasserts its place in the Magnificent 7

 
Josh Gilbert, Market Analyst at eToro, said: “Nvidia reasserted its place in the Magnificent 7 with another blowout quarter showing that AI use cases are exploding, and the AI boom is showing no signs of slowing down.

“It was a massive beat on earnings at $5.16 compared to estimates of $4.60, whilst revenue hit $22.1 billion, higher than the $20.41 expected. Its data centre business, the catalyst behind this impressive growth, saw revenue jump by 400% year-over-year, underpinning its status as the golden child of AI.

“The big question for investors is, can this continue? Put simply, yes. Nvidia continues to deliver in every way, and its results show there is still plenty of growth ahead. This isn’t just a flash in the pan, nor a bubble, but a business that continues to make serious cash.

“Despite the risks from issues in China and ongoing competition, that can pose headwinds moving forward, Nvidia raised its guidance for the next quarter to $24 billion in revenue, putting it on track to nearly $100 billion in sales over the next year.”
 

WPP investors should brace themselves for more underwhelming results

Mark Crouch, Market Analyst at eToro, said: “Advertising is typically first on the chopping block in times of economic uncertainty and with inflationary pressures hampering businesses across the globe in recent times, this has translated into an underwhelming set of results for WPP. The firm saw revenues grow by just 0.9% like-for-like in 2023 as weak spending by tech, healthcare and retail clients held back growth in Britain and India.

“Shareholders will likely still be reeling from the two profit warnings issued by the company in 2023 and would have been eager to see what the business plans to do in order to turn their fortunes around and pull the advertising agency out of this current rut. While the company remains optimistic they can deliver accelerated and increasingly profitable growth over the medium term, it’s fair to assume market conditions will need to improve quickly in order for that to happen.”

Rolls-Royce boss can take credit for turnaround of the century

Adam Vettese, Market Analyst at eToro, said: “What’s not to like in this Rolls-Royce update? Profit has doubled, cash flow is up and costs and net debt have come down. CEO Tufan Erginlilgic seems to have carried out the turnaround of the century, given shares are now trading at a six-year high and are 10 times higher than their Covid low.

“The rollercoaster in between really put Rolls-Royce shareholders through the wringer, with grounded planes seeing the aerospace engine producer burn cash at an alarming rate, while demand fell through the floor. Now profit is on a very different trajectory with the firm set to build on 2023’s success with higher guidance for this year. This is not surprising as we are seeing no let-up in demand in civil aviation as well as defence spending, both areas in which Rolls-Royce has a strong foothold. If this comes to fruition, then it won’t be long before the dividend is back also.”