Must read: Nvidia’s earnings, market rally, US jobs report

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GLOBAL MARKETS 

NVIDIA Corp (NASDAQ:NVDA)’s earnings have sparked risk-on sentiment with a sea of green across European markets.

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In the UK, Polar Capital Technology Ord (LSE:PCT) is trading near the top of the FTSE 100 thanks to a rebound in demand for tech stocks. Games Workshop Group (LSE:GAW) is up over 10% after a strong trading update, and Halma (LSE:HLMA) is also up by more than 10%, hitting a new record high after raising its annual revenue forecast. 

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Shares in Asia have also enjoyed the shift in market mood with the Nikkei snapping a four-day losing streak. US futures are pointing higher with the tech-heavy Nasdaq leading the gains, up around 1.8%. The risk-on mood is dampening demand for gold, but it is fuelling gains for cryptocurrencies with Bitcoin, Ether and Solana sharply higher. 

Now that Nvidia’s event risk is out the way, investor attention shifts to the delayed US jobs report for September with just 50,000 job additions anticipated, adding to signs of significant weakness in the labour market.

Meanwhile, the Bureau of Labor Statistics (BLS) has cancelled October’s jobs report. Patchy economic data makes life much harder for the Federal Reserve when it comes to analysing the economy and deciding on interest rates.

NVIDIA 

Nvidia reported quarterly revenue in the three months to October up 62% to $57 billion (£44 billion) and its current quarter sales forecast is for around $65 billion, both ahead of forecasts. It achieved record data centre revenue of $51.2 billion, rising 66% year-on-year. Adjusted earnings per share hit $1.30 vs forecasts for $1.25. 

Nvidia’s blockbuster earnings silenced the bears with the artificial intelligence (AI) bulls back on the front foot. The bar was set extremely high for the AI poster child, yet Nvidia still managed to beat these lofty expectations. Its data center revenue, which contributed to Nvidia’s post-earnings share price decline in August, hit a record high this time round, in an extremely bullish sign for the company’s progress. It enjoyed a stellar performance across the board with record Blackwell sales and accelerating AI demand.  

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November has been challenging for Nvidia’s share price and the broader AI space amid fears of overvaluations in the sector with some big investors including Michael Burry and Softbank turning against the stock.

There has been no shortage of high-profile voices sounding the alarm about a bubble even including AI insiders such as the CEOs of Alphabet Inc Class A (NASDAQ:GOOGL) and OpenAI. However Nvidia’s earnings tell a very different story, suggesting the high valuations are justified and there could even be more upside to come for AI stocks. CEO Jensen Huang tried to put to bed fears of a bubble by saying “we see something very different”, adding “we excel at every phase of AI” and the numbers speak for themselves. 

Nvidia’s shares in Frankfurt have opened sharply higher this morning as investors cheer Nvidia’s quarterly update, sparking a major relief rally across global markets. Analysts are feeling more positive towards the stock now too with price target upgrades from Jefferies, JP Morgan, Bernstein and Deutsche Bank.