Nvidia shares were lower in the US market after the chip maker smashed Q3 revenue and earnings estimates but fell short of analysts’ expectations for Q4 revenue guidance.

The 4% drop in Nvidia shares despite sales nearly doubling in Q3 compared to the prior year underscores just how high investors’ expectations are for the chip maker that has led the AI-fueled rally in US tech stocks.

Some called yesterday’s earnings release the biggest ‘macro’ event of the week, highlighting the narrow nature of the US equity rally focused on just seven tech shares and the impact their earnings can have on the global equity market.

Despite missing revenue guidance predictions, Nvidia’s results were nothing short of astounding. The company has nearly doubled its revenue in a year and expects revenue growth to continue apace through the rest of the year. Bloomberg News pointed out that Nvidia’s data centre revenue is larger than the total revenue of both AMD and Intel combined.

“Nvidia has once again breezed past expectations and set the scene for a blockbuster finish to the year. Data Center took the lion’s share of the glory, growing revenue 112% to $30.8bn,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

“And the base of that demand is growing beyond the AWS’s and Azures of this world, with customers of note including Softbank, who are set to become an early adopter of next-generation Blackwell chips and the Danish government. It’s also helping to underpin AI infrastructure with local cloud providers across India, Japan and Indonesia.”

The big question for investors is whether Nvidia’s softer-than-expected sales guidance is enough to derail the broader AI rally. Lower US equity future indicates investors aren’t entirely happy with the results. However, the small scale of the declines suggests investors are marginally disappointed with the results rather than fearful the AI trade is over.

CleanTech Lithium shares jumped on Thursday after the company announced a significant milestone by successfully producing its first batch of pilot-scale lithium carbonate at a facility in Chicago, USA.

The Chilean-focused exploration company is developing Direct Lithium Extraction (DLE) technology designed to produce environmentally friendly lithium.

The company has successfully processed its first tank of concentrated lithium solution, producing 50kg of lithium carbonate on November 19th, with expectations to yield approximately 150kg of battery-grade product from the complete tank within a week. This initial production represents just the first phase of processing, with a total of 88 cubic meters of concentrated solution shipped from the company’s Chilean pilot plant to Conductive Energy’s facilities in Chicago.

CleanTech Lithium has already initiated discussions with potential strategic partners interested in testing the product. Following laboratory analysis to confirm the grade and impurity profile, the company plans to distribute samples ranging from several to tens of kilograms to begin the product qualification process.

The milestone was celebrated with a site visit to what is currently the largest pilot plant operating in the northeastern United States.

“CleanTech Lithium has reached an important milestone by commencing pilot scale lithium carbonate production using a sustainable and innovative DLE based process,” said Steve Kesler, Executive Chairman and Interim Chief Executive Officer, CleanTech Lithium PLC.

“As a leader in the DLE sector in Chile with a focus on efficiency and sustainability, this accomplishment marks a significant step forward. Years of hard work have led to this important milestone, and it sets the stage for future development with a commitment to supporting the transition to electric vehicles and clean energy. Thank you to the partners involved and we look forward to enter the next phase of development.”

JD Sports shares sank on Thursday after the sportswear retailer announced a poor trading period that would impact full-year profits.

JD Sports has announced that, following challenging trading conditions in October, it expects full-year profits to be at the lower end of its previous guidance range of £955-1035 million.

The sports fashion retailer cited softer consumer demand and increased promotional activity in the market as key factors affecting performance.

JD Sports shares were down 9% at the time of writing.

The company reported mixed results in its third-quarter trading update, covering the 13 weeks to November 2, 2024. While the back-to-school period showed strength, the latter part of the quarter saw weakened consumer demand, particularly in the US, where spending appeared suppressed ahead of the upcoming election.

With JD Sports heavily reliant on Nike for new products, Nike’s recent troubles with sales and its share price will have also affected both JD Sports trading activity and sentiment around the stock.

“Nike’s recent struggles are creating uncertainty for JD Sports. Our experts say JD relies on Nike’s strength since its products typically have higher price tags than other brands, helping boost profits,” said Yanmei Tang, Analyst at Third Bridge.

“More margin volatility is inevitable as other brands gain more shelf space in stores. These brands usually have shorter product life cycles, leading to increased promotional activity.”

Despite these headwinds, the group maintained its focus on margin management, achieving a slight increase in gross margin of 0.3 percentage points to 48.1%.

The retailer’s expansion strategy remained robust, with organic sales growth reaching 5.4% during the period, driven by an aggressive store rollout programme. However, like-for-like sales declined by 0.3%, with strong performance in August and September offset by a weaker October. Physical stores outperformed online channels, while footwear sales yielded better results than apparel.

“Trading volatility picked up in October, particularly across North America and the UK, leading to increased discounting in the sector to help keep tills ringing,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“JD’s been reluctant to offer the same level of promotion as the competition, which has helped to protect its margins. But it’s also meant sales growth has slowed over the third quarter and full-year profits are now expected to come in at the lower end of previously downgraded guidance.”

Regionally, European operations demonstrated resilience, delivering both like-for-like and organic sales growth, while other markets experienced more challenging conditions. The company continued its expansion plans, opening 79 new JD stores during the quarter, bringing the total store count to 4,541, including 1,179 locations acquired through the Hibbett acquisition.

JD Sport is heavily reliant on new stores for growth, so suggestions that it is struggling to find the appropriate sites to facilitate this growth strategy will be an additional turn off for investors.

“JD Sports is finding it tough to translate its UK success to international markets. It’s grappling with site availability in Italy, affordability issues in Eastern Europe, and tricky market conditions in the US,” said Tang.

The company noted that its acquisition of Courir is nearing completion, which will add a female-oriented retail chain to its portfolio, further diversifying its market presence.

Digital technology services provider Made Tech (LON: MTEC) says the strong start to the year has continued into the second quarter. Sales bookings of £37.5m have been achieved so far this year. This means that revenues should be ahead of expectations with margins maintained. A full year pre-tax profit of £1.3m is forecast. The company should generate cash in 2024-25. The outlook for government spending on digital transformation is positive. The share price is 21.65 higher at 22.5p.

Kazera Global (LON: KZG) has secured environmental authorisation for the Perdevlei concession ahead of expectations. The next step is securing the mining right for the high-grade heavy mineral sands deposits. The share price increased 13.3% to 1.275p.

A positive trading statement from digital advertising services provider Silver Bullet Data Services (LON: SBDS) has won more contracts worth £1.5m and October was the best ever month. Clients include BMW and Visa. Committed 2024 revenues are £9.3m, compared with £8.3m for the whole of 2023. The share price is 8.08% ahead at 53.5p.

Restructuring and professional services provider FRP Advisory (LON: FRP) improved interim revenues by one-third to £77.6m and organic growth is 23%. That is mainly due to strong demand for restructuring services – The Body Shop was one of the clients. Litigation and contentious insolvency demand was also firm. The share price rose 7.85% to 158p.

FALLERS

Proton Motor Power Systems (LON: PPS) is going ahead with plans to leave AIM and winding down the business. Talks with a potential German industrial partner over funding have ended. The company has net liabilities. The share price slumped 70.6% to 0.125p.  

In-content advertising company Mirriad Advertising (LON: MIRI) says full year revenues will be in the range of £1m to £2m. Progress has been slower than expected in the US and some contracts have been cancelled. Discussions with large advertising agencies continue but the timing of deals is uncertain. The annualised cost base is reduced to £8m. At the end of October there was £6m in the bank. The share price dived 41.8% to 0.16p.

Churchill China (LON: CHH) had a tougher second half than expected with a lack of seasonal uplift in the fourth quarter. This means that 2024 pre-tax profit will be well below expectations. Next year is expected to continue to be weak with hospitality businesses hit by higher National Insurance costs. There will also be a hit for Churchill China and costs are being reduced, but 2025 expectations are also downgraded. The balance sheet remains strong. The share price is 18.2% lower at 675p.  

PHSC (LON: PHSC) interim revenues dipped 2% to £1.57m and it fell into loss. That was due to higher costs, particularly in terms of salaries. Recruiting and retaining staff has been difficult. A one-off security contract ended. There is no interim dividend. The share price fell 17.5% to 23.5p. Pro forma NAV is 31.7p/share, including cash of £505,000.

The FTSE 100 posted minor gains on Wednesday, which would have come as a welcome relief for UK equity investors, given the backdrop of geopolitical risks and rising UK inflation.

Concerns about possible escalation in the Ukraine-Russia war were reignited yesterday after Russia hinted at the use of nuclear weapons in response to missile attacks deep in Russian territory.

However, the spike in risk aversion didn’t last long, and the FTSE 100 was trading comfortably above 8,100 in early trade Tuesday. That said, the choppy nature of trade this week dictated that these gains may not last long, and the FTSE 100 slipped into negative territory as the session progressed.

“After yesterday’s wobble on heightened tensions between Russia and the West, the FTSE 100 was steady in early trading on Wednesday,” said AJ Bell investment director Russ Mould.

“For now, investors seem to have largely shrugged off concerns about the Ukraine war. Moscow said yesterday the Ukrainians had fired US-made long-range missiles into Russian territory after President Joe Biden gave them the green light to do so. However, investors will be watching closely for signs of further escalation.”

All eyes will be on the US and Nvidia earnings later this evening. Although the AI trade has slowed, it is still very important for broader sentiment and an upbeat report from Nvidia has the potential to power global equities higher.

Movers

Sage Group shares soared 18% higher after reporting an 11% jump in revenue and 21% increase in EBITDA. Share buybacks again played a bit part of the gains as investors dived into the latest UK share announcing a very respectable programme.

“Sage’s software produces payslips among other things and perhaps that’s exactly what they’re delivering to shareholders this morning. This update is ticking a lot of boxes – profits up by 21%, margins up and growing, dividend hiked and big share buyback programme announced. What’s not to like to investors?,” said Adam Vettese, market analyst at investment platform eToro.

Beleaguered housebuilder Vistry was bottom of the leaderboard again as shares sank another 6% on news of management shakeup. The builder has made major cost miscalculations, leading to an obliteration of the share price, and shareholders will be demanding action. The change shows Vistry is trying to address the problem but investors seem unimpressed.

Weakness in Vistry weighed on the rest of the housebuilding sector, with Persimmon and Barratt Redrow fell more than 2%.

GenIP shares jumped on Wednesday after the Generative AI analytics firm announced surging orders and pointed to encouraging negotiations with potential new clients.

After listing on London’s AIM in October, GenIP has announced a series of corporate updates that provide insights into the pace of sales and orders for its Generative A analytics services.

Today’s announcement revealed orders for their technological discovery commercialisation assessments have more than doubled since the last update in October.

GenIP works closely with research institutions such as universities and corporations to help bring new technologies to market by providing comprehensive reports on commercial opportunities and potential valuations using their proprietary GenAI models. The level of orders announced today suggests these organisations see real value in GenIP’s offering and have acted by ramping up activity.

The company also announced its first client in Saudi Arabia, demonstrating the global reach GenIP has established.

Perhaps the biggest takeaway from today’s update was the announcement of GenIP’s largest order since the launch of their Generative AI services. A leading Fortune 100 technology company client has placed an order for 30 assessments, bringing the total number of GenAI assessment orders to 195. GenIP previously announced orders for 80 assessments in October.

“We are delighted to have received GenIP’s largest single order since our GenAI enhanced services launched,” said Melissa Cruz, CEO of GenIP

“The calibre of our clients and the orders for multiple volume reports demonstrates the utility of our technology transfer services for research institutions seeking to improve commercialisation of their new discoveries. Additionally, we are highly encouraged by our interactions with leading innovators at recent industry events in Singapore and Brazil and are confident these will translate to additional orders for GenIP’s services.”

Looking ahead, GenIP are engaged in negotiations with over 50 new potential clients and ‘looks forward to announcing significant commercial milestones in the near term’.

GenIP shares were 10% higher at the time of writing.

British Land shows signs of stabilisation after a period of uncertainty as the company transitions its portfolio to better-performing assets.

Property operators have suffered during the pandemic, and uncertainties around working and shopping trends have rocked rental value across vast swathes of commercial properties.

British Land reacted by shaking up its portfolio, and the Real Estate Investment Trust’s realignment is gathering pace. British Land has disposed of non-core assets and reinvested in retail parks to capture the out-of-town shopping experience, a mainstay for consumers as high streets crumble away.

Retail parks now account for 32% of the portfolio, up from 15% in 2021. The company also mentioned robust demand in the City and sees a supply/demand imbalance in the coming periods.

The portfolio’s realignment has culminated in 3% rental growth over the recent half-year period and guidance for 3%- 5% rental growth over the full year.

“British Land is laying solid foundations for recovery, proving that even in challenging markets, a giant landlord can still think on its feet. Rent growth is driving revenues forward while stabilising interest rates are helping to steady property values. The focus on retail parks and London campuses continues to deliver, tapping into areas of strong, sustainable demand,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“Retail parks are the clear standout. British Land’s recent £441m acquisition of seven new parks was a bold move, cementing its position as a leader in this space. These assets, prized for their affordability and flexibility, are benefiting from a wave of retailer expansion, and British Land’s confidence here looks well-placed.”