Brian Sozzi
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Stock market today: Dow leads US futures higher in aftermath of Nvidia earnings
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US stocks were poised for gains on Thursday, with the Dow leading the advance as the dust settled after Nvidia's (NVDA) solid but disappointing earnings and investors reassessed the prospects for techs.
Dow Jones Industrial Average futures (YM=F) were up 0.5% to eye a return to setting record highs. Futures on the tech-heavy Nasdaq 100 (NQ=F) rose 0.1%, while those on the S&P 500 (ES=F) moved up roughly 0.2% on the heels of losses for all three gauges.
Stocks are taking a positive sheen amid Wall Street's lackluster reception for the numbers from Nvidia, whose stellar growth streak has underpinned the market's rally this year.
While the AI chipmaker's quarterly profit and revenue guidance topped estimates, the size of the beats fell short of high-running hopes. That started to stir questions as to whether the AI boom has peaked and initially dragged Nvidia's stock down 6%, though the shares are recovering in pre-market trading.
Also in focus is a potential rotation out of tech stocks, given the more solid gains for the Dow and the Russell 2000 (RTY=F) before the bell.
Elsewhere in earnings, Salesforce (CRM) shares popped after a big earnings beat by the software maker. Results from Best Buy (BBY), Gap (GAP), and Ulta Beauty (ULTA) are on the docket on Thursday.
At the same time, an update on weekly jobless claims due may well revive the rate-cut debate, as could a reading on second quarter GDP. The market is closely watching economic data for a steer on how fast and deep the Federal Reserve will lower interest rates, now that Chair Jerome Powell has clearly flagged a cut is coming in September.
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HP logs another challenging quarter
Mixed quarter at best for computer and printer giant HP Inc (HPQ).
The company continued to see pressure in its printing business, in part because of the ongoing work-from-home dynamic. Meanwhile, the AI PC ramp has yet to take hold and remains a lot of hype.
"HPQ results held signs of a PC market recovery in the strength of the Commercial PS segment being enough to offset the weaker revenue outcomes in Consumer PS as well as Print to deliver modestly better revenue in F3Q. However, the macro headwinds are driving softer results in the other segments, which is in turn is impacting margins, and leading to a modest moderation in the earnings outlook for F4Q and FY24 relative to prior expectations," said JP Morgan analyst Samik Chatterjee in a client note.
I caught up with HP CEO Enrique Lores last night. You can watch part of that chat below. Take note of what Lores said about the spread and impact of AI. I think a lot of cost-cutting is coming to Corporate America next year because of AI, and we are seeing signs of it already (check out the mass layoffs recently announced at TurboTax seller Intuit (INTU)).
Nvidia quick take
Nvidia (NVDA) shares are getting hit pre-market as the quarter didn't live up to super high Wall Street expectations.
But the earnings call sure did, I think. There was no indication from the call that demand is slowing, actually quite the contrary. Everything Nvidia talked about suggested a further acceleration in demand for its high-powered AI chips.
That said, I am seeing the Street tweak estimates this morning amid higher expenses related to the production ramp for Blackwell chips.
Good points here by Ruben Roy over at Stifel:
"Blackwell production ramp is scheduled to begin in F4Q, with expectations for several billion dollars in revenue in that quarter followed by volume increases to continue into F2026. In the near-term, higher operating expenses and modestly lower gross margin (new product mix) will moderate EPS growth. Bigger picture, the modernization of data center compute continues and, in our view, NVDA remains the primary beneficiary."
Salesforce aims to better monetize AI
Salesforce (CRM) shares are on the move higher following a comeback quarter after the close.
I caught up with Salesforce chairman and CEO Benioff, and came away very interested in the company's new "agents" that it will begin deploying within companies. These will basically be AI-powered robots that interact with humans to, say, close deals and upsell.
Interestingly, Salesforce will charge clients per conversation for the product — which could add up to real money.
Here is my full chat with Benioff following his earnings call last night.