Shares in Nvidia (NVDA) were up less than 1% in pre-market trading on Wednesday morning, after closing the previous session 2.8% in the red, as US markets fell broadly amid continued concerns about an AI bubble.
The chipmaker’s third quarter earnings, which are due out after the US market close on Wednesday, will be a key test of investor conviction in Big Tech stocks given its role as an enabler of the AI boom. Lofty valuations of major tech stocks and unease about the level of company spending on AI has prompted recent market jitters.
On Tuesday, Nvidia, Microsoft (MSFT) and Anthropic announced they were teaming up in the latest AI partnership, which will see the chipmaker invest up to $10bn (£7.6bn) in Anthropic.
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For the third quarter, Nvidia has guided to revenue of $54bn, plus or minus 2%, and said it expects gross margins of 73.5%, plus or minus 50 basis points.
Analysts are anticipating the chipmaker will report revenue of $55.2bn for the three months, and adjusted earnings per share (EPS) of $1.26, according to Bloomberg consensus data. That would represent increases of 55% and 57% versus the $0.81 EPS and $35.1 billion the company reported in the same period last year.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Investors will be closely watching the fourth quarter guide after CEO Jensen Huang’s recent upbeat comments on order flow.
“Fourth quarter revenue forecasts currently stand at $61.7bn which will be the number to beat.”
NasdaqGS – Delayed Quote • USD
At close: 18 November at 16:00:00 GMT-5
Shares in internet services provider Cloudflare (NET) were trading just over 1% in the green in pre-market trading on Wednesday, recovering some ground after falling nearly 3% in the previous session following a global outage.
The outage on Tuesday hit platforms such as X and ChatGPT. In a blog post later in the day, Cloudflare CEO Matthew Prince said that it had resolved the issue.
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Prince said the issue was “not caused, directly or indirectly, by a cyber attack or malicious activity of any kind”.
“Instead, it was triggered by a change to one of our database systems’ permissions which caused the database to output multiple entries into a ‘feature file’ used by our bot management system,” he said. “That feature file, in turn, doubled in size.”
NYSE – Delayed Quote • USD
At close: 18 November at 16:00:02 GMT-5
In Asia, shares in Xiaomi (1810.HK) fell nearly 5% on Wednesday after the Chinese tech company warned that consumers would probably see higher smartphone prices next year as a result of rising memory chip costs.
According to a Reuters report, Xiaomi president Lu Weibing said in an earnings call on Tuesday that he expected “pressure to be much heavier next year than this year”, referring to rising memory chip costs.
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“Overall, consumers are likely to see a sizeable rise in product retail prices,” he reportedly said. “Some of the pressure may have to be addressed through price hikes, but price increases alone won’t be enough to digest it.”
In third quarter results released on Wednesday, Xiaomi reported revenue of 113.1 billion yuan (£12.11bn), which was up 22.3% from the same period last year. Pre-tax profit of 14.9 billion yuan was 129.5% higher than the third quarter of 2024.
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On the London market, shares in Jet2 (JET2.L) popped nearly 4% after the airline reported record passenger numbers in the first half of its fiscal year.
This helped drive a 5% increase in revenue to £5.34bn ($7bn) in the six months to 30 September, with pre-tax profits edging 1% higher to £800.3m and earnings per share rising 8% to 300.4p,
Jet2 said it was increasing its interim dividend by 2.3% to 4.5p per share and announced another share buyback worth £100m.
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In its results on Wednesday, the airline also noted the impact of its advert going viral on TikTok over the summer, saying that the “unprecedented activity” on social media had resulted in increased marketing reach and widened brand awareness among younger demographics.
Mark Crouch, a market analyst at eToro, said: “Jet2’s latest update offers a far brighter outlook than the brooding skies of September, when a profit warning and trimmed winter schedules had investors gripping their seats.”
At the same time, Crouch said that the “colour behind Jet2’s numbers is more nuanced”.
“Management notes that travellers are booking closer to departure, a habit that keeps revenue visibility frustratingly foggy, and the decision only weeks ago to cut winter capacity still hangs awkwardly in the air,” he said.
Retailer WH Smith (SMWH.L) announced on Wednesday that Carl Cowling had resigned as CEO, following an investigation into an accounting blunder in the company’s US division.
WH Smith said that Cowling would step down with immediate effect and that Andrew Harrison, who heads up the retailer’s UK division, would take over on an interim basis until a permanent replacement is appointed.
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The announcement came alongside the release of findings from an independent review of the company’s 2023 to 2025 fiscal years by Deloitte, which identified a number of “shortcomings”, according to WH Smith chair Annette Court.
As a result, WH Smith said it now expected group headline profit before tax to be in the range of £100m to £110m for the 2025 fiscal year.
Despite these updates, shares in WH Smith traded nearly 1% in the green on Wednesday morning. They are down 48% year-to-date, however.
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As of 10:38:44 GMT. Market open.
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