10:45am: Nvidia’s ‘gold medal performance’
Nvidia’s results “gave tech investors everything they wanted in a present with a red bow,” according to Wedbush’s Dan Ives.
Ives’ enthusiasm came despite the absence of revenue from China’s H200, which he sees as unlocking further upside once geopolitical tensions ease.
Ives highlighted CEO Jensen Huang’s efforts to counter fears around AI software disruption, noting that enterprise software players like Microsoft and ServiceNow remain central to the AI revolution. “The software layer will ultimately be the hearts and lungs of the AI trade over the coming years,” he said, adding that current market expectations underestimate the monetization potential in the sector.
Wedbush expects Nvidia to continue dominating a $4 trillion total addressable market for AI infrastructure, projecting the company could reach a $6 trillion market cap by 2027. Ives also pointed to hyperscale capex guidance from Amazon, Meta, and Alphabet as evidence of accelerating AI investment. He likened Nvidia’s performance to a young Michael Jordan: a “gold medal performance” signaling only the beginning of a transformative, AI-driven growth phase for the tech sector.
9.52am: Mixed start as Dow rises but Nasdaq drops
It’s a mixed start on Wall Street.
While the Dow has started up 0.4%, the S&P 500 is down 0.3% and the Nasdaq has dropped around 0.8%.
Nvidia has dropped around 2.3%.
Biggest fallers on the Nasdaq 100 are Synopsys and Broadcom, both down over 3%, followed by AMD, Seagate, Western Digital and Micron, down around 2%.
Top risers for the Dow are UnitedHealth and American Express, with Salesforce also positive, swinging from its afterhours decline.
8am: Nasdaq and Dow futures flat pre-open
US stock futures were edging towards a flat start early on Thursday morning, as afterhours earnings from Nvidia and Salesforce continued to be digested.
Nasdaq and Dow Jones futures were just below flat, down less than 0.05%, while S&P 500 futures were very modestly in the green.
Helping things, Nvidia shares were up 1.5% in premarket trading, having earlier been flat on the back of last night’s blockbuster earnings.
The chipmaker blew past Wall Street expectations as demand for AI chips continues to soar, with fourth-quarter revenue up 73% year-on-year to $68.13 billion and adjusted EPS up 82% to $1.62, above the $1.50 expected and Nvidia’s 16th beat in the past 17 quarters.
The company highlighted the surge in AI adoption, with computing demand “growing exponentially — the agentic AI inflection point has arrived.”
Looking ahead, Nvidia expects first-quarter revenue of around $78 billion, versus the $72.78 billion analysts anticipated, assuming no revenue from China’s data center market, and has $58.5 billion remaining in its buyback program.
Kate Leaman, chief market analyst at AvaTrade, said the beat should be “a green light for tech risk appetite”, and could provide a tailwind for semis, software, and AI-adjacent plays on the “validation that multi-year capex waves are real”.
But while the stock initially popped 4% afterhours, it cooled off.
“Why? Because this isn’t about whether NVDA delivered. It did,” said market analyst Kenny Polcari at Slatestone Wealth.
“This is about expectations. The market wants certainty. It wants guarantees that the AI capex boom won’t slow. That hyperscalers won’t blink. That margins won’t compress. That nothing breaks. And that’s laughable.
“We’re talking about a company growing revenue 70%+ at scale — and the complaint is that it wasn’t even better.
“This is what happens when a stock becomes the proxy for an entire industrial revolution. The bar moves from ‘beat’ to ‘prove it again — and make it bigger’.”
Salesforce was down 3%, however, as the software company reported better-than-expected quarterly results but issued an outlook that came in slightly below Street expectations on revenue.
Subscription revenues were up 13%, adjusted operating margins were slightly better than estimates, free cash flow was up 39% and a $50 billion share buyback was announced alongside a dividend hike.
Polcari said this was “all about the ongoing concerns that AI is going to destroy it”.
JPMorgan equity strategist Abigail Yoder told CNBC: “When you look at software right now, the earnings revisions on a one to two-year basis are positive.
“So this isn’t about what’s going to happen to software earnings in the next one to two years,” she said. “This is about their terminal value in ascribing a certain valuation to that, which I think the market is just wrangling around right now.”
In other corners of the market, oil prices were under pressure, with WTI down 2.2% to under $64 a barrel ahead of an OPEC+ meeting this weekend.
This is against a backdrop of reports that Saudi Arabia and other producing nations are shipping significant volumes, while US-Iran negotiations are ongoing, keeping the Strait of Hormuz calm and supply flows uninterrupted.
Economic data today includes initial jobless claims and continuing claims, plus the Kansas City Fed manufacturing survey.
Tomorrow comes the January PPI – factory gate prices – and it is expected to show a decline in price pressures.
