Jensen Huang, president and CEO of Nvidia, speaks during the company’s event at the 2019 Consumer Electronics Show in Las Vegas on Jan. 6, 2019.
David Paul Morris | Bloomberg | Getty Images
This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed 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
Markets rebound
Major U.S. indexes rose Wednesday, with the S&P 500 gaining more than 1% for the first time since June 30 and the Nasdaq Composite posting a three-day winning streak. Asia-Pacific markets traded higher too. Hong Kong’s Hang Seng Index popped more than 2% while mainland China’s Shanghai Composite added 0.83%. However, economists remain concerned that China’s deflation could spill over into the global economy.
India lands on the moon
India successfully landed its Chandrayaan-3 spacecraft on the moon Wednesday, making India the fourth country to do so, after Russia (then the Soviet Union), the U.S. and China. More impressively, India landed its spacecraft on the moon’s south pole, the first time for any country. The feat signals India’s entry as a national superpower in space.
Prigozhin in plane crash?
Russian state media reported the chief of the Wagner Russian mercenary group Yevgeny Prigozhin died in a plane crash Wednesday. However, it was not immediately clear if Prigozhin was in the aircraft, which was flying from Moscow to St. Petersburg. Prigozhin last appeared in a video that seemed to be filmed in Africa, published Monday by Wagner-affiliated channels.
[PRO] Stocks riding on Nvidia’s wave
Nvidia’s blowout earnings are a “pivotal moment for AI and the AI supply chain,” Morgan Stanley said in a note issued following the semiconductor company’s report. These are the bank’s favorite global stocks to seize the AI opportunity.
The bottom line
There’s nothing else to talk about Nvidia today — and what a blockbuster day it is.
A year ago, Nvidia CEO Jensen Huang promised investors the company is “navigating our supply chain transitions in a challenging macro environment and we will get through this.”
It wasn’t just corporate CEO bluster. Just look at the numbers Nvidia reported. Compared with a year earlier, Nvidia had a 101% jump in quarterly revenue. And a 422% … leap? expansion? — what’s the right noun to use here, even? — in net income. Those figures don’t typically crop up in earnings reports.
It was a “‘drop the mic’ moment … that will have a ripple impact for the tech space for the rest of the year,” said Dan Ives, senior equity research analyst at Wedbush Securities. Indeed, we can already see the ripples across the Pacific Ocean. Asian semiconductor stocks surged Thursday following Nvidia’s report.
Sure, as mentioned earlier, Nvidia disappointed last year. Comparing with a low base always helps to make percentage increases look more impressive.
But consider this: Nvidia’s second-quarter revenue beat not only its own expectations — an immodest (but apparently realistic!) 50% higher than Wall Street’s forecast back then — but also that of analysts.
In other words, Nvidia has been underpromising and overdelivering, as CNBC’s Robert Hum puts it. Therefore, Nvidia’s forecast of a 170% jump in current-quarter revenue, compared with a year ago, might in fact be too timid. Hum goes on to suggest it’s possible that, three months later, Nvidia reports revenue of $18 billion to $19 billion. That’s almost $3 billion more than the $16 billion Nvidia said it expects.
Shares of Nvidia climbed about 6.6% in extended trading today, pushing its price north of $500. But this echoes Nvidia’s own propensity to underpromise and overdeliver, because it’s all but certain its share will catapult even further.
Chaim Siegel, an analyst at Elazar Advisors, lifted his price target to $1,600 — three times Nvidia’s current share price — and still said his “numbers are too conservative.” We’re only about 6 hours away before U.S. markets open. Let’s see how high the shares can jump.
— CNBC’s Robert Hum and Kif Leswing contributed to this report