Nvidia (NVDA)
Nvidia is scheduled to release its latest financial results after Wall Street closes today, and the company is in the spotlight as its stock price more than tripled last year amid enthusiasm for AI.
The chipmaker, which dominates the data center AI chip market, is expected to report fourth-quarter sales of around $20 billion (£15.86 billion) and earnings per share of $4.60. By comparison, a year ago, sales were only about $6 billion and EPS was just 88 cents.
Missed earnings and downward revisions to forward guidance are likely to trigger a wave of profit-taking in the technology sector, dragging down the broader market. However, a stronger-than-expected report could add further upward momentum and attract more investors who are already experiencing some degree of FOMO.
“Signs of tension were clearly visible yesterday as NVDA fell over 4%, dragging the rest of the market south,” said Neil Wilson, chief market analyst at Finalto.
“At a profit margin of 30 times, there is little room to exceed it, and the market is a little concerned that the 50% year-to-date profit increase will be less than profit.You might call it profit taking, but in 2025 I think there is still a good chance that the forecast for 2020 will be revised upward.” ”
HSBC (HSBA.L)
HSBC on Wednesday warned investors that its pre-tax profit would rise nearly 80% to $30.35 billion in 2023 due to high interest rates. It became unsupported.
Shares fell more than 7% after Europe's biggest bank suffered a lower-than-expected writedown of $3bn (£2.3bn) on its stake in Chinese bank Bank of Communications.
The bank's 2023 pre-tax profit rose 78% to $30.35 billion, and net income rose 56% to $22.43 billion. Following the strong increase in full-year profits, the bank announced new share buybacks of up to $2 billion.
The London-headquartered bank also announced its fourth interim dividend of $0.31 per share, bringing the total for 2023 to $0.61 per share.
“Our record profit performance in 2023 will reward shareholders with our highest full-year dividend since 2008, three share repurchases totaling $7 billion last year, and additional share repurchases of up to $2 billion. ” said Noel Quinn, group executive.
In addition to three share buybacks totaling $7 billion, Quinn said the bank returned $19 billion to shareholders last year.
read more: HSBC's full-year profit soars due to high interest rates
Glencore (Glenn L.)
Glencore plunged into the red in London last year as it revealed its revenue had halved as a result of falling commodity prices.
Although underlying profits fell by 50% to $17.1bn (£13.5bn) and the share price fell to its lowest level in a year, it was still one of the company's best ever results.
As the energy crisis grips Europe, profits surge following Russia's invasion of Ukraine in 2022.
Glencore cut its dividend to $1.6 billion and announced no share buyback program for the first time in years.
The company also reduced dividends to investors, with the purpose of funding the acquisition of a 77% stake in Teck Resources' metallurgical coal business.
read more: FTSE 100 LIVE: UK records biggest budget surplus in January, European stocks fall
“While the current macroeconomic environment remains challenging, global economic growth is expected to bottom out in 2024,” said CEO Gary Nagle.
“Demand conditions are likely to improve in Western markets later this year due to expected interest rate cuts and associated replenishment in supply chains.”
The company also took a $2.5 billion writedown at year-end, including a $762 million writedown on its Mutanda copper and cobalt mine in the Democratic Republic of Congo.
BAE Systems (B.A.L.)
BAE Systems expects profit growth to slow in 2024, after rising 14% last year as defense companies' order backlogs swelled to record levels. This was driven by new submarine contracts and demand during the Ukraine war.
Underlying earnings per share are expected to rise between 6% and 8% this year, compared with a stronger-than-expected 14% rise to 63.2p in 2023.
It added that the British arms maker had won contracts worth £38bn last year, including deals related to Britain's next-generation nuclear deterrent submarines, the Oaks Defense Agreement and combat vehicles to be purchased by Central and Eastern European countries.
Chief Executive Officer Charles Woodburn said: “Most of our order volume is driven by existing program positions from before the Ukraine conflict, but we also have orders for heavy armor and ammunition replenishment and upgrades. It's starting to arrive,” he said.
BAE expects sales to grow 10-12% this year, up from 9% last year, and has increased its annual dividend by 11%.
However, the stock price fell by up to 3% on the day.
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