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ASX Live Coverage Highlights – May 29
Nvidia Q1 Earnings Call Insights
Time: 9:10 AM
Nvidia’s latest earnings call revealed key trends affecting the landscape of artificial intelligence and chip manufacturing. With China ramping up its AI initiatives, the U.S. faces challenges in maintaining its dominance amidst stricter export controls that may inadvertently bolster Chinese competitors. However, optimism remains, particularly with a pro-crypto U.S. administration and a resurgence in domestic manufacturing.
Key points from the earnings call include:
- Transition to Inference: Nvidia’s CFO noted a robust shift towards AI inference workloads, contributing significantly to incoming revenue.
- Hyperscaler Deployment: Major tech companies are reportedly deploying around 1,000 NVL72 racks weekly, indicative of strong demand for Nvidia’s Blackwell GPUs.
- Surging Demand: A noted spike in inference demand was acknowledged, with Microsoft generating over 100 trillion tokens in Q1—a fivefold increase year-on-year.
- Order Backlog: Nvidia’s CEO highlighted a sturdy order pipeline and ongoing supply chain expansion efforts.
- Chinese Chipmaker Growth: The CEO also remarked that export limitations aimed at Chinese firms may have inadvertently enhanced their global competitiveness.
Nvidia Stock Reaction
Time: 9:00 AM
Following the release of its quarterly results, Nvidia shares surged by 4.1% in after-hours trading. Significant highlights from the earnings report include:
- Revenue Growth: Revenue soared by 69.2% to $44.0 billion, surpassing estimates slightly.
- Data Centre Performance: Data centre revenue increased by 73.3% but fell short of expectations.
- Gross Margin: Despite a decline, gross margins exceeded estimates by a notable margin.
- Earnings Per Share (EPS): EPS rose to $0.96, beating projections.
- Future Guidance: The guidance for Q2 anticipates continued growth, though it slightly missed estimates.
Overall, the results were mixed due to uncertain market conditions stemming from adjustments relating to Chinese inventory.
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Marcus Padley’s Insights: Padley discusses a range of market topics from bond market instability to future prospects for lithium and WiseTech.
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RBA Cash Rate Adjustment: The Reserve Bank of Australia has revised its neutral cash rate down to 2.7%, igniting debates on how policymakers may navigate future interest rate adjustments amidst a shifting inflation landscape.
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Market Snapshot
Time: 8:50 AM
The U.S. markets experienced a downturn overnight, with major indices reporting declines (S&P 500 -0.56%, Nasdaq -0.51%, Dow -0.58%).
Market influences include:
- Rising Bond Yields: Following a weak demand for long bonds in Japan, there are calls for a reduction in long-bond supply.
- Trade Tensions: EU negotiators express concerns about the possibility of escalating trade tensions with the U.S., necessitating deeper concessions to avoid a trade conflict.
Opening Market Commentary
Time: 8:40 AM
S&P/ASX 200 futures showed a minor uptick, rising by 13 points (+0.15%) despite a lacklustre performance from Wall Street.
For newcomers, a quick catch-up on recent market developments is available in today’s Morning Wrap.
This summary encapsulates essential highlights from Nvidia’s earnings call, recent market trends, and leading business stories while ensuring the information remains clear and engaging to the reader.
