Nvidia Corp.’s (NVDA) blowout earnings and sales forecast amid optimism about opportunities related to artificial intelligence sent the chipmaker’s stock soaring and boosted broader market sentiment, with Japan’s Nikkei hitting an all-time high and major U.S. stock index futures pointing higher this morning. In contrast, electric vehicle makers are struggling, with shares in both Rivian Automotive (RIVN) and Lucid Group (LCID) tumbling after they projected disappointing output this year. Here’s what investors need to know today.
1. AI Darling Nvidia Soars on Blowout Quarterly Results, Strong Guidance
Nvidia Corp.’s (NVDA) shares soared more than 13% in premarket trading after the company’s fiscal fourth-quarter results and revenue expectations for the current quarter shot past Wall Street estimates on strong demand for its chips, which dominate the market for artificial intelligence (AI). Chief Executive Jensen Huang said that generative AI has “hit the tipping point” with demand “surging worldwide across companies, industries and nations.” The company guided first-quarter sales of $24.0 billion, well above Wall Street forecasts of $22.17 billion.
2. Nvidia Results Send Japan’s Nikkei to Record Highs; US Stock Futures Pointing Higher
Japan’s benchmark stock average surged to a record high on Thursday, surpassing its 1989 bubble-era peak, as Nvidia’s bullish outlook lifted chip-linked shares. The Nikkei Stock Average of 225 shares ended 2.19% higher at 39,098.68, topping the previous all-time closing and intraday highs set on Dec. 29, 1989, at the peak of the nation’s bubble economy. Chip-making equipment maker Tokyo Electron closed 6% higher, while SoftBank Group, whose chip designing unit Arm Holdings Plc (ARM) has benefited from AI enthusiasm, ended up 5.1%. Arm shares are up 9% in pre-market trading in the U.S. Meanwhile, major U.S. stock indexes are poised to open higher this morning, with stock futures tied to the S&P 500 up 1.3% and those tied to the tech-heavy Nasdaq Composite up 2.1% about two hours before the opening bell.
3. Rivian Slumps on Weak Output Forecast; EV Maker To Cut 10% of Salaried Staff
Shares of Rivian Automotive (RIVN) fell almost 15% in premarket trading, after the electric vehicle maker said it plans to cut 10% of its salaried staff and would deliver the same number of cars in 2024 as it did last year. The company said it expects to produce 57,000 vehicles in 2024, far short of analysts’ average estimate of more than 80,000 units. “Economic and geopolitical uncertainties and pressures, most notably the impact of historically high interest rates, have informed our expectations for 2024,” the company said in its Q4 2023 shareholder letter.
4. EV Maker Lucid Also Falls on Disappointing Sales, Production Guidance
Shares of Lucid Group (LCID) sank nearly 9% in early Thursday trading after the luxury electric vehicle maker posted lower-than-expected fourth quarter sales and guidance that disappointed analysts. Lucid’s quarterly revenue fell to $157.2 million, from $257.7 million the prior year, and the EV maker said it expects to produce 9,000 vehicles in 2024, falling short of forecasts.
5. January Home Sales Data Due After December’s Housing Market Freeze
January sales numbers for previously owned homes are due this morning and will give an insight into whether lower mortgage rates—which have edged down from last year’s peaks—are succeeding in encouraging home buying after sales for 2023 were the slowest since 1995. Expectations are for the National Association of Realtors to report that sales rose a seasonally adjusted 4.8% from December, according to economists surveyed by The Wall Street Journal.
