Must read: Kingfisher rockets, Nvidia in AI mega tie-up

GLOBAL MARKETS

The FTSE 100 has opened higher, with Kingfisher (LSE:KGF) leading the charge up over 18% after raising its full-year profit outlook. Focus this morning is on the latest European PMI figures trickling out. So far, we’ve seen disappointing readings from France - September’s flash manufacturing, services and composite PMIs all fell short of expectations and came in below the key 50 boom-bust divide. The UK PMI numbers are due at 9:30am.

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In the US, futures are pointing to a flat open following gains for the S&P 500 and the Nasdaq on Monday fuelled by AI excitement. Meanwhile, shares in Apple Inc (NASDAQ:AAPL) have turned positive on the year thanks to Monday’s gains after the release of its new iPhone and other products on Friday.

Gold has gained to a fresh all-time high on the back of a weaker dollar while oil has fallen for the fifth consecutive session driven by concerns about oversupply.

NVIDIA

NVIDIA Corp (NASDAQ:NVDA) is investing up to $100 billion (£74 billion) in OpenAI and will supply the company with data centre chips. OpenAI CEO Sam Altman said this will ‘create new AI breakthroughs and empower people and businesses with them at scale’.

This is a mega tie-up between two of the most exciting AI companies in the world. Their collaboration will no doubt create anxiety for other AI rivals. However, for Nvidia, this is clearly a major win, reflected by its share price gain last night, up 4.4% to hit fresh record highs, solidifying its position as the world’s most valuable company by market cap. Positive AI market momentum also supported Oracle Corp (NYSE:ORCL), which is already working with OpenAI.

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The announcement between Nvidia and OpenAI is the latest in a series of collaborative deals between AI players, as the tech behemoths look for ways to harness each other’s strengths in a bid to prevail in the AI arms race. However, there are competition concerns that might scupper the deal and there are now question marks around OpenAI’s own ambitions to create a cheaper rival custom chip to Nvidia’s blockbuster GPUs.

KINGFISHER

Kingfisher has raised its full-year profit outlook and accelerated its share buyback programme. The owner of B&Q said it is targeting the upper range of guidance for full-year adjusted pre-tax profit of between £480 million and £540 million.

Meanwhile, first-half profit rose 10.2% to £368 million while sales grew by 1% to £6.81 billion. It enjoyed a strong performance in the UK at B&Q and Screwfix with like-for-like sales up 4.4% and 3% respectively and it enjoyed market share gains in the UK, France and Spain.

This is an extremely encouraging update for investors in Kingfisher – the company was able to up its full-year guidance thanks to a strong H1 performance, improving free cash flow and second half weighed investments to support growth. In the first half, the UK and Ireland performed particularly well with total sales up 4.5% and retail profit up 5.7% driven partly by strong seasonal demand and favourable weather as well as product innovation.

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However, there are still notable headwinds including cost pressures from wage inflation and higher national insurance contributions this year, as well as political and consumer sentiment uncertainty and UK labour market weakness ahead of the Autumn Budget.

Shares in Kingfisher are soaring by over 18%, underscoring the significant positive shift in sentiment among investors towards the stock in light of today’s update. Until yesterday’s close the stock was down 23% over the last year with today’s trade helping to erase much of those losses.