Market gripped by Nvidia figures

A look at the day ahead in European and global markets by Tom Westbrook

Nvidia is captivating the investment community ahead of an earnings report due later today. Even if it delivers the expected doubling of revenue in the second quarter, it may not please investors accustomed to the company’s outperformance in the market.

The chipmaker’s market value was around $390 billion on the eve of the launch of its artificial intelligence (AI) chatbot ChatGPT less than two years ago.

Now worth nearly $3.2 trillion, and briefly the world’s most valuable company in June, it runs on chips that are the hardware behind the boom in AI computing technology.

The company’s sheer size and position as an industry bellwether mean its earnings figures, due to be released after the U.S. close of business on Wednesday, could have an impact on the entire market.

Trading in Asia was light and moves were modest ahead of the release, and European stock futures remained flat.

The data and reporting calendar for Europe is largely empty. Eurozone money supply growth is expected to rise to 2.7%, while markets focus on Nvidia’s results ahead of European and US inflation figures due later in the week.

Options prices show that traders are bracing for a nearly 10% swing in Nvidia’s stock when it trades Thursday. In dollar terms, that equates to a market value of more than $300 billion. It’s likely the biggest market move ever on an earnings report.

That would far exceed the market capitalization of 95% of S&P 500 companies, according to data from LSEG, and would likely send shockwaves through the global semiconductor sector.

Elsewhere, the pound was close to a 2-1/2 year high on Wednesday as one of the biggest beneficiaries of a dollar slide. Traders expect around 100 basis points of U.S. rate cuts this year versus just 40 bps in Britain.

While the market waits for Nvidia to take center stage, fans of Oasis, who signed their first recording contract in 1993, just weeks after Nvidia was founded, can join the battle for hotel rooms in Manchester following the announcement of planned Oasis reunion shows next year.

Key developments that could impact markets on Wednesday:

Revenue: Nvidia

Economy: Eurozone M3 growth, unemployment in France

(By Tom Westbrook; Editing by Edmund Klamann)