Asian technology shares climbed after Nvidia doubled its quarterly revenue to nearly $100bn and forecast third-quarter revenue above Wall Street estimates. South Korea's Kospi and Samsung Electronics led the advance, though Japan's Nikkei and Australia's benchmark slipped. The chipmaker's shares jumped in post-market trading as investors weighed the results against fresh questions on margins and China exposure.
Nvidia's results reset the AI trade
Nvidia, the world's most valuable company with a $5tn market cap, reported second-quarter revenue of $96bn. That is set to rise to $108bn in the third quarter. Chief executive Jensen Huang said demand is accelerating as the AI industry has reached a golden age, and, according to Kathleen Brooks, research director at XTB: "nothing short of stunning".
Shares in the chipmaker rose 4.7% in post-market trading to $219.53, and Brooks expects the rally to push the stock through $220 and toward the $235 high it touched in May. The results followed a recent sell-off in tech shares on Wall Street and in Asia, which had contributed to a sharp drop in the South Korean stock market in July.
Asian markets diverge on the news
South Korea's Kospi rose 1.3%. Memory chipmaker Samsung Electronics gained 3%. The Shanghai and Shenzhen exchanges climbed 0.95% and 1.37% respectively, while Singapore added 0.4% and Taiwan gained 0.3%.
However, other major Asian markets moved lower. Japan's Nikkei edged 0.2% lower, and the Australian exchange fell nearly 1%.
Margins and China remain open questions
Nvidia reported gross margins of 75% but guided to 74%, citing rising memory prices, and management suggested margins could trough around 71% before recovering. The company also highlighted roughly $2 trillion of backlog, suggesting demand remains exceptionally strong.
Still, China contributed little to the current numbers, leaving it one of the bigger unresolved issues for the company. Attention now turns to the Jackson Hole economic policy symposium, which opens in the US today, with investors awaiting a keynote address from Federal Reserve chair Kevin Warsh on Friday.
Source: Business | The Guardian
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