Must read weekly preview: Prudential, Nvidia

Nvidia CEO Jensen Huang. Credit: Angela Piazza/The Dallas Morning News via Getty Images.

Prudential – Wednesday 26 August

Richard Hunter, Head of Markets, interactive investor says, “Prudential (LSE:PRU) shares have fallen by 11% so far this year, largely driven by concerns over a Chinese crackdown on cross-border investments in the region. This has resulted in estimates of 30% of the group’s new business being driven by mainland China investors buying Hong Kong savings products being reduced to 17%, which has weighed on the price.

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However, many feel that any such concerns have been priced in on a worst-case scenario basis and, for its part, Prudential is showing few signs of pressure. Its first-quarter update in April revealed annual premium equivalent (APE) sales of $1.8 billion (£1.3 billion), up by 6%, an increase of 10% in new business profit and a 2% improvement in margins as the group chases higher-quality growth.

More broadly, a current highlight is the group’s assertion that it has reached an inflection point in its growth of free surplus capital generation, which in turn will result in higher shareholder returns. Indeed, last year’s $2 billion share buyback programme was completed, followed by an announcement in January of a further $1.2 billion, to be followed by another $1.3 billion programme in 2027. The dividend was also increased by 15% and, while the projected yield after the hike remains a pedestrian 1.9%, the share buyback direction should prove more than enough to assuage investors.

Prudential is now focused on Asia and Africa, where the group is fully aware that such major continents bring significant opportunities. The combined populations of the two continents is around four billion, with an estimated $1 trillion of additional annual gross written premiums by 2033 being the addressable market. In addition, the group previously noted that insurance penetration remains low in Asia, where growing demand for savings and protection products come alongside the need for wealth management and retirement planning amid a higher income market. Given the recent weakness of consumer confidence in the region, it will be interesting to see whether, when customers are reluctant to spend, they turn to saving and wealth planning instead.

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Elsewhere, the focus on digital distribution and the move towards more technology-based solutions continues apace, such as the increasing use of advanced analytics and AI for higher value purposes, which is being selectively trialled. Less positively, and from a broader perspective, heightened geopolitical tensions between the West and China cannot be overlooked, while competition across its markets persists. The sector as a whole has had a challenging start to the year, with an uncertain recovery in China, wider market weakness and potential AI disruption in distribution all playing a part, let alone fractious geopolitical relationships.

Despite the dip this year, the shares have risen by 4% over the last 12 months and by 57% in the last two years, even though the price remains down by 46% from the most recent peak achieved in January 2018. However, with increasing shareholder returns allied to the significant potential and promise in both Asia and Africa, the likelihood of Prudential remaining a core portfolio constituent for investors will no doubt remain high.”

Nvidia – Wednesday 26 August

Victoria Scholar, Head of Investment, interactive investor says, “NVIDIA Corp (NASDAQ:NVDA) delivers its fiscal 2027 second-quarter earnings report after the market close on Wednesday. There is a high bar going into these earnings as shares have fallen after its most recent four quarterly earnings reports, despite very impressive numbers. It comes as the company is looking to evolve beyond a pure AI chip supplier into a full-stack AI factory architect.

The company at the heart of the AI infrastructure roll-out is expected to report revenue of around $91 billion and earnings per share of $2.09. Investors will be paying close attention to its all-important data centre revenue figure, which looks set to shine, as well as its Q3 guidance for clues into its outlook. The performance of Blackwell Ultra and any indications about Vera Rubin will be in focus, as well as any comments around its recent AI infrastructure financing deals. Possible sales in China could be the wildcard this quarter, not factored into its guidance after it started shipping powerful H200 AI chips to China, although they are expected to be quite small.

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Last quarter, Nvidia reported sales of $81.62 billion up 85% year-on-year and adjusted earning per share of $1.87, both beating expectations. Over 90% of sales came from data-centre revenue, which soared to $75.2 billion, $38 billion of which came from the hyperscalers. It announced a new way of reporting its earnings in two segments – data centres and edge computing. Nvidia also returned more cash to shareholders through an $80 billion share buyback programme and upped its dividend to 25 cents per share.

Shares in Nvidia are up around 16%, outperforming the Nasdaq and S&P 500 but underperforming some of the 2026 standout semiconductor winners like Micron Technology Inc (NASDAQ:MU) ,which is up over 200%.

Although it has participated in less of this year’s upside, it has also been more resilient to the recent AI market volatility, as investors view Nvidia as the quality player in the semiconductor sector, underpinned by high margins and a strong track record.”