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Australian shares are set to decline as Wall Street closed lower, with market participants awaiting Nvidia’s (NASDAQ:NVDA) quarterly results, released after the closing bell. Nvidia reported a second-quarter revenue increase of 15% from the previous quarter and a 122% jump from the same period last year. The company’s third-quarter revenue projection is approximately $US32.5 billion, with shares dipping in after-hours trading as some anticipated a more optimistic forecast.
Nvidia's CEO, Jensen Huang, highlighted the strong demand for the Hopper chip and the significant anticipation for Blackwell, Nvidia’s most advanced chip designed to enhance artificial intelligence applications. Production for Blackwell is slated to ramp up in the fourth quarter and continue into fiscal 2026. Nvidia's CFO noted that several billion dollars in revenue from Blackwell shipments are anticipated in the fourth quarter, with Hopper demand remaining robust into the second half of fiscal 2025.
During the first half of fiscal 2025, Nvidia returned $US15.4 billion to shareholders through share repurchases and cash dividends. As of the end of July, the company had $US7.5 billion remaining under its share repurchase authorization. On August 26, the board approved an additional $US50 billion for share repurchases without an expiration date.
Vanda Research indicated that retail market participants directed record amounts toward Nvidia ahead of its earnings, presenting a potential market risk. The surge in retail trading of Nvidia shares has overshadowed other stocks, especially following a brief rotation into small caps in mid-July. Nvidia's earnings call is seen as a key indicator of future AI spending trends. Meeting current market expectations may not suffice to support the share price, with more robust and positive guidance increasingly critical.
Options trading suggests a possible near 10% movement in Nvidia’s shares in either direction following the earnings report. Given Nvidia's substantial market cap, this could result in a significant shift in valuation.
On the Australian market, several companies, including Steadfast, Atlas Arteria, IGO, Mineral Resources, Perpetual, Qantas, South32, Sandfire, Southern Cross Media, Wesfarmers, Waypoint REIT, and Silex Systems, are set to report on Thursday. Mineral Resources has announced it will forgo its dividend for the first time in a decade to focus on cost reduction and defer expansion projects.
Rio Tinto is moving to resolve disputes with minority stakeholders, traditional owners, and governments over a uranium project in the Northern Territory. Meanwhile, global market highlights show ASX futures down by 25 points, Bitcoin dropping 4.3%, and mixed performances among major US tech and industrial stocks.
Market sentiment is becoming more defensive, with signs of risk management seen in derivatives trading. The SKEW index, often an indicator of “Black Swan” events or extreme market moves, has surpassed a key threshold, indicating strong flows into defensive positions among institutional participants.
Key items on today’s agenda include economic data releases from New Zealand, Australia, and the Eurozone, as well as key figures from the US, such as second-quarter GDP and pending home sales. In the US, Super Micro Computer shares saw a significant decline after announcing delays in financial disclosures amid a critical report from Hindenburg Research. Meanwhile, Berkshire Hathaway became the first non-tech US company to reach a $US1 trillion market value.
Other notable stories include Australian political maneuvers, debates over student caps, and the Greens’ electoral strategies.
