Your portfolios in brief
Nvidia (NVDA), an undisputed leader in artificial intelligence (AI) and graphics processors, continues to captivate investors and analysts alike. Founded in 1993, Nvidia has established itself as a global pioneer in the design of graphics processors and AI-related technologies, with a presence in many countries and thousands of employees worldwide.
-Highlights in 2023 :
Annual guidance: Despite geopolitical challenges, notably export restrictions in China, Nvidia demonstrated impressive growth.
Sales for the quarter: The company reported sales of $18.1 billion for the October quarter, up 206% year-on-year.
Product performance: Strong demand for IA GPUs, used in data centers, was a key driver of this growth.
Adjusted earnings forecasts: Nvidia forecasts sales of $20 billion for the January quarter, with an adjusted gross margin forecast at 75.5% and an exceptional adjusted operating margin of 65%.
Impact of ChatGPT and AI: The introduction of OpenAI's ChatGPT, backed by Microsoft in 2022, has boosted demand for Nvidia GPUs, as many companies look to integrate similar generative AI capabilities into their software.
Challenges and competition: The company faces competition from AMD and a drop in revenues due to export restrictions in China. However, some analysts remain optimistic. According to Srini Pajjuri and Jacob Silverman of Raymond James, demand for GPUs continues to outstrip supply as generational AI adoption broadens across different sectors.
Stock market performance: Excluding after-market movements, Nvidia shares have risen by 241% this year, significantly outperforming the S&P 500 index, which is up by 18% over the same period.
Market reaction: Despite solid results, the share price fell slightly, probably due to profit-taking by professional investors. This market reaction does not reflect the company's exceptional performance or outlook.
Innovations and outlook: Nvidia continues to accelerate its pace of innovation with breakthroughs such as TensorRT LLM and the future H200. These developments strengthen Nvidia's position in the crucial AI market.
-Conclusion:
To sum up, the year 2023 for Nvidia is a perfect illustration of the complex dynamics of the high-tech market. Despite geopolitical challenges and increased competition, Nvidia has demonstrated a remarkable ability to innovate and dominate in the crucial sector of artificial intelligence and graphics processors. The company's outstanding financial results and technological advances are testament to its leadership position and strategic vision. At Pratte Portfolio Management, our confidence in Nvidia has been strengthened by these developments. This is a company that is actively shaping the future of AI and data processing, promising exciting returns and a significant influence on the global technology landscape.
Markets in brief
Monday
-Encouraging rise on Wall Street
Dow Jones: The index rose 0.58% to close at 35,151.04 points.
NASDAQ: The index gained 1.13% to close at 14,284.53 points.
S&P 500: The broad index gained 0.74% to close at 4,547.38 points.
The rise was boosted by a successful US debt issue, which eased market concerns. The Treasury sold $16 billion of 20-year bonds at a yield of 4.73%, slightly lower than the market yield of 4.77%.
Although Peter Boockvar of Bleakley Financial Group observed a demand/supply ratio below the annual average, indicating moderate interest, the issue was robust enough to support the bond market. This was evident in the decline in the yield on 10-year Treasuries, from 4.43% to 4.41%.
This debt issue, a response to the US government's growing deficit, allayed fears of a rate hike needed to attract investors. This skilful debt management played a key role in maintaining Wall Street's positive momentum, contributing to the remarkable performance of the S&P 500, which has recorded 14 positive sessions in the last 16 trading days.
-Stockss in brief
Microsoft (+2.05%): Microsoft shares hit a record high, boosted by the hiring of Sam Altman, co-founder and former CEO of OpenAI. Microsoft seems to be strengthening its position in the field of generative artificial intelligence.
Nvidia (+2.25%): Nvidia saw its share price rise ahead of the publication of its quarterly results, indicating a growing interest in artificial intelligence and technology.
Boeing (+4.65%): Boeing benefited from a positive recommendation from Deutsche Bank, with a significant rise in its share price following forecasts of increased aircraft deliveries.
Bristol Myers Squibb (-3.82%): The company suffered a decline after announcing the postponement of a decision by the U.S. Food and Drug Administration regarding the expansion of use cases for its cancer treatment Abecma.
Palo Alto Networks (+5.2%): The company saw a significant jump of 5.2%, probably reflecting strong investor confidence in its growth prospects and recent performance.
Intel (+2.1%): Intel also posted an appreciable 2.1% increase, indicating a positive market reaction to its strategic initiatives and recent financial results.
Paramount (+5.6%): Paramount saw its shares climb 5.6%, a move that can be attributed to positive developments within the company or favorable reactions to its recent announcements.
Netflix (+1.8%): Netflix also experienced a rise, with a 1.8% increase in its shares. This rise may be linked to positive news about the company, or a reassessment of its value by investors.
-Inflation slows in Canada
In October 2023, Canada saw a notable slowdown in its inflation rate, which stood at 3.1%, close to the Bank of Canada's target. This slowdown is mainly due to lower gasoline prices. Excluding gasoline, the Consumer Price Index (CPI) rose by 3.6%, according to Statistics Canada.
In Quebec, although prices remained stable in October, annual inflation of 4.2% remains the highest in Canada. The main factors contributing to the year-on-year increase in the CPI remain mortgage interest costs, food purchased in stores and rent. In particular, rental prices continue to rise rapidly, with a notable increase of 8.2% nationally and 9.1% in Quebec.
This downward trend in inflation is a reassuring sign for Bank of Canada decision-makers, indicating that current interest rates are high enough to significantly cool inflationary pressures. Measures of core inflation monitored by the Bank of Canada are also showing a slight downward trend, although not enough to completely dispel concerns about price trends.
This situation could influence future interest rate decisions by the Bank of Canada, notably at its next rate decision scheduled for December 6. With the Canadian economy showing signs of stagnation and inflation expected to slow further, many economists believe that the current rate hike cycle could be over.
Tuesday
-Falling markets:
Dow Jones: The index edged down 0.18%.
NASDAQ: The index fell more sharply by 0.59%.
S&P 500: The broad index fell by 0.20%.
North American markets experienced a down session, marked by a pause after a series of gains. This downward trend came against the backdrop of a wait-and-see market ahead of the Thanksgiving holiday in the USA. Profit-taking was observed on leading stocks such as Microsoft, Amazon and Broadcom. Disappointing results in the retail sector, with retailers such as Best Buy and Lowe's revising their forecasts downwards, also weighed on the market.
The publication of the minutes of the latest meeting of the US Federal Reserve did not elicit any noticeable reaction from market players. During the meeting, Fed officials did not rule out the possibility of a further tightening of monetary policy. However, experts at Oxford Economics pointed out that a number of economic factors have changed since that meeting three weeks ago, including an accelerated decline in the inflation rate.
- Stockss in brief
Best Buy (-0.72%): the company underperformed expectations, with a downward revision of its annual targets.
Lowe's (-3.12%): the company anticipates a considerable decline in annual sales.
Kohl's (-8.57%): Kohl's forecasts a contraction in annual sales.
Abercrombie & Fitch (-2.41%): the company expects a positive fourth quarter despite the current downturn.
Dick's Sporting Goods (+2.17%): The company rose on the back of a good performance.
Symbiotic (+40.15%): Symbiotic rose spectacularly after announcing impressive sales growth.
Wednesday
-Wall Street on the rise :
The New York Stock Exchange closed higher, despite Nvidia's decline following the filing of its quarterly results. The indices posted modest but significant gains:
Dow Jones: The index rose by 0.53% to close at a level not specified in the article.
NASDAQ: The index gained 0.46%, ending the day on a positive note.
S&P 500: The index climbed 0.41%, reflecting a general uptrend in the market.
In periods of low trading activity and limited information, it is common to expect a bullish market trend. This situation was confirmed during Wednesday's session, notably due to reduced trading activity ahead of the Thanksgiving holiday in the United States, which resulted in lower trading volumes.
-Stockss in brief
Nvidia (-2.46%): Despite outperforming expectations for the third quarter, Nvidia suffered a decline due to concerns about new export restrictions to China.
Microsoft (+1.28%): Microsoft saw its share price rise, benefiting from the announcement of Sam Altman's return to the helm of OpenAI, in which Microsoft holds a significant stake.
AMD (+2.82%) and Qualcomm (+0.38%): These semiconductor companies benefited from Nvidia's situation.
Deere (-3.11%): Despite better-than-expected quarterly results, Deere saw its share price fall due to less optimistic earnings forecasts for fiscal 2024.
Thursday
Markets were closed for Thanksgiving in the United States.
Friday
- There was little movement on the stock markets in the morning:
Dow Jones Industrial Average: The index edged up 58 points, up 0.16%.
S&P 500: The index edged down 0.04%.
NASDAQ: Index down 0.2%.
Shares in the major retail companies posted mixed performances as the holiday shopping season opened with Black Friday. Walmart was up 0.2%, while Amazon was down 0.2%. According to Oliver Chen, analyst at TD Cowen, the trend in store visits this Black Friday would be stable, with consumers being more budget-conscious and favoring gifts for others rather than themselves.
For the week as a whole, the Dow and S&P 500 were each up 1%, as was the NASDAQ. This would be the longest streak of weekly gains for the S&P 500 and NASDAQ since June, and for the Dow since April.
This comes against a backdrop of Treasury yields hitting multi-month lows this week, fuelling hopes of a slowdown in inflation and a pause in rate hikes by the Federal Reserve. The benchmark rate was up 5 basis points at around 4.468% on Friday.
The US stock market will close at 1 p.m. on Friday, after closing the previous day for Thanksgiving.
