Nvidia’s hot chips

Hey Superheroes,

We’re cruising through the August full-year reporting season—just over halftime already. So far, retailers’ profits have taken a hit (except for Wesfarmers’), and China’s economic concerns are having a ripple effect.

Thankfully, some fire results from Nvidia in the U.S. gave our sharemarket a serious mid-week pep talk.

Nvidia’s hot chips crush expectations

Call it Nvidia, call it tech gold. Over the past year, the chipmaker’s market value has surged a jaw-dropping 230%—leaving rivals in the dust.

And this week, it didn’t just beat Wall Street expectations. It demolished them…by US$2 billion. The company’s Q2 earnings report showed US$13 billion in revenue and earnings per share clocking in at $2.70. Its quarterly sales doubled from the prior year.

🍪 What else?

Nvidia’s board of directors just approved a share buyback of US$25 billion (with plans to continue repurchases this fiscal year). Could this mean this chipmaker’s more than a few tricks up its sleeve?

📖 A bit of background

Despite its new-kid-on-the-block reputation, Nvidia’s a 30-year-old company. 

But recently, the company has spent a lot of time and money on chips to make building AI systems faster and cheaper. Just in time for ChatGPT, and while chip rivals like Intel and AMD focused on the safe bets (where there was already demand), like data centres.

Now, Nvidia is one of just six companies on the planet worth more than US$1 trillion today—joining Apple, Microsoft, Saudi Aramco, Alphabet and Amazon.

Talk about peaking late (in tech years).

oOh! Could the ad times be a-changing?

In the wild world of Aussie advertising, there’s a seismic shift underway.

Fresh off its mid-year report, ad giant oOh!media’s stock rose nearly 6% this week, along with its adjusted net profit which increased by $0.1 million to hit $20.5 million.

🤔 Never heard of ’em?

Well, unless you’re an ad wizard, this company might’ve slipped under your radar. But its market cap is worth about $780 million. (For reference, that’s $280 million more than Seven West Media.)

CEO Cathy O’Connor believes the dip in free-to-air TV could pump a staggering $500 million into the world of billboards and digital screens.

Those high-tech billboards they own? They’re the cash cows, raking in 5x the moolah of old-school billboards. Even if they age faster.

🔦 Some other things we’re shining the Spotlight on:

DIP-IDENDS: Australia’s corporate giant, BHP, revealed a 37% tumble in profits on Tuesday, per its latest earnings report. But despite the bearish reports, the company is still gearing up to post its fourth-largest dividend to date.

ELECTRIFYING GROWTH: Software provider Altium rose 27% and raised its dividend after reporting a 20% surge in yearly profits. The American-Australian company posted a net profit of US$66.3 million, with revenue rising 19% to US$263.3 million.

LI-ON WINDFALL: Pilbara Minerals’ share price slumped almost 6%, despite delivering a massive $3.4 billion new profit and 307% earnings boost. The company is apparently setting its sights on producing more lithium from its Pilgangoora mine.

MAGICAL KINGDOM TURBULENCE: Disney witnessed a 3.9% overnight drop, hitting its lowest point in nearly 9 years. Apparently shareholders are unenchanted by CEO Bob Iger’s subscription price hikes, ad model and cost-cutting.

Hope you enjoyed this week’s Spotlight.

Make sure you stay on top of next week’s full-year and Q2 earnings. Reports expected from Fortescue Metals, Lynas Rare Earths, Mineral Resources, Flight Centre Travel Group and Salesforce.