Nvidia has undoubtedly been the world’s most closely watched stock this week.

Earnings released on Wednesday produced a disappointing reaction in the stock, but the results themselves were not a disappointment as they confirmed momentum in demand for chips was intact.

Expectations were high going into Nvidia’s earnings update this week, and anything less than a blowout to the upside was going to weigh on shares.

As the stock settles into a trading range, analysts at XS.com have provided technical commentary on the key levels for NVDA shares in the coming trading sessions:

“The better-than-expected report is likely to lead to price fluctuations with an upward bias, but the stock’s decline and breach of the 50-day moving average at $117.70 could result in further weakness,” said Rania Gule Senior Market Analyst at XS.com.

“Looking ahead to the medium and long term, the markets should respect four key technical price levels that may play a role if Nvidia’s shares continue to decline following yesterday’s strong earnings.

“The first support level is at $116. This area may provide initial support near the trendline connecting the May peak and the counter-trend price surge that occurred in early August. A move below this level could push the stock down to the $107 region, a key demand and reversal area on the daily chart between May and August.

“Further decline may lead to a retest of the crucial $99 level, where Nvidia shares are likely to encounter significant support near the March peaks, with the first of these peaks representing the previous all-time high for the stock.

“Lastly, it’s essential to watch the $91 zone, which is a lower price target for the descending column pattern from July to August, identified from the highest point of the recent price channel formation. Should such a move occur, it would confirm a descending channel pattern in the stock and could potentially lead to a retest of this month’s low at $90.70 in the medium term.”

Filtronic plc, a leading designer and manufacturer of products for aerospace, defence, space, and telecoms infrastructure markets, has announced a new production order from SpaceX valued at $8.4 million.

This order continues the demand for Filtronic’s E-band solid state power amplifier (SSPA) modules, crucial components in SpaceX’s Starlink satellite constellation.

The irrevocable order is set to be fulfilled in the calendar year 2025, prompting Filtronic to upgrade trading projections to be ahead of current market expectations for FY2025.

This latest contract win falls under the Strategic Partnership agreement signed in April 2024.

“We are delighted to receive another production order from our partner, SpaceX, as we continue to support the deployment of the Starlink constellation with E-band technology,” said Nat Edington, Chief Executive Officer of Filtronic.

The order has triggered SpaceX’s vesting of an additional 2,171,211 share warrants as part of the long-term partnership established between SpaceX and Filtronic earlier this year.

This brings the total number of vested warrants under the first tranche to 10,856,055, reaching the maximum 5% of the company’s share capital as stipulated in the agreement. With this milestone, Filtronic confirms that future E-band SSPA orders from SpaceX will no longer result in further warrant vestings under this tranche.

ECR Minerals looks set to be the latest natural resources junior to add a helium project to its investments.

Citing recent excitement in the share prices of companies that have pivoted towards helium, ECR wants a piece of the action and announced the expansion of its strategy to include US helium projects. 

A number of UK-listed shares that have hit a dead end with existing operations have shifted to helium to revive the company’s prospects.

ECR Mineral’s Chairman and Managing Director, Nick Tulloch has experience reinventing cannabis company Voyager Life as a helium play.

Voyager’s shares collapsed early in 2024 following a failed merger with another cannabis firm, and the company emerged as a helium producer. 

Helium has a wide range of medical and industrial applications and is important for space travel.

ECR Minerals says it sees value in selling and distributing helium in the US and will target only assets in production or with the potential for near-term production.

Comments accompanying today’s announcement highlight the difficulties of extracting helium, and the company made it clear it didn’t want to get involved in helium exploration.

“Although it is often tempting to think that the important part of developing a natural resources play is to find the resource, in fact we consider that it is production and sales that really define a company,” said Nick Tulloch, Chairman of ECR Minerals.

“There are many substantial resource deposits globally that are simply not economic – or possible – to extract and sell. This is particularly the case with helium. Despite its high value, it is not a straightforward element to process or transport.”

“Therefore, as we examine this possible expansion of ECR, it is critical that we source assets that are capable of near term production, and therefore sales, of helium and access to nearby infrastructure, both gathering lines and a processing plant, is a must.”

Touching on the funding of ECR Mineral’s expansion into helium, the company said it wouldn’t conduct a placing at a discount to the current share price.

The FTSE 100 has shaken off any concerns about disappointing Nvidia earnings and pushed higher on Thursday with banking and consumer stocks among the top risers.

Although Nvidia shares fell after the company announced results last night, the drop can be attributed to profit-taking rather than any major concerns with the numbers. There certainly wasn’t anything in the numbers to suggest the AI theme was coming to an end or that there was any slowdown in momentum.

“The FTSE 100 ticked higher despite a technology-led sell-off in the US overnight and a negative after-hours reaction to Nvidia’s results – the lack of tech stocks in the UK index proving a rare boon on Thursday morning,” said AJ Bell investment director Russ Mould.

“Consumer-facing names were getting some love from the market along with resources stocks on a quiet day in London for corporate news.”

We mentioned yesterday that the FTSE 100 has shown remarkable resilience throughout August’s volatility. Although there are many occasions that investors wish they had a greater weighting to US tech than FTSE 100, today’s 0.3% gains for the FTSE 100 is a reminder of the defensive nature of the index and its ability to preserve value when other markets are under the cosh.

Banks rebound

UK banks rebounded a day after a comment in an FT article suggested the Labour government could be eyeing up banking profits in their upcoming tax raid budget.

“UK banking stocks came under some pressure yesterday after reports suggested the new government may be looking at additional taxes on the sector,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“There’s precedent here, the sector already suffers from elevated taxes in the form of the bank levy and corporation tax surcharge. Details are thin on the ground but given any tax would likely be UK focused, this would impact domestic players like Lloyds and NatWest more so than those with a global presence.”

Any concerns about the impact of additional taxes were short-lived, as the government itself is yet to signal that it was planning additional taxes on banks. Lloyds shares rose 1%, and Barclays ticked 1.6% higher. After a strong rally in recent weeks, things could become very interesting for banking stocks should Rachel Reeves drop in any hints to back up yesterday’s jitters.

Diageo was the top faller after one of its peers posted soggy results. Diageo has released a series of disappointing updates, and it appears that peers are experiencing their problems, suggesting that its woes may persist.

In a significant move to broaden its market presence, Tekcapital portfolio company Innovative Eyewear (NASDAQ:LUCY) has announced the availability of its Lucyd Lyte frames on Target.com.

Tekcapital has made a number of announcements regarding developments for Innovative Eyewear in 2024; today’s may just be the most important one, both in terms of potential revenue generation and the delivery on Innovative Eyewear’s strategy to focus distribution through retail outlets.

The partnership with Target.com brings Lucyd ChatGPT-enabled smart eyewear to one of the largest retail platforms in the United States. Target Corporation, with its vast network of nearly 2,000 stores across the country and a robust online presence, serves millions of US customers daily.

By securing a place on Target.com, Innovative Eyewear gains access to a massive customer base, potentially exposing its smart eyewear products to millions of new consumers nationwide.

“Target is a long-time favourite retailer of mine, as well as millions of loyal customers in the US,” said Harrison Gross, CEO of Innovative Eyewear

“Their focus on product quality, style and accessibility makes Target.com an ideal channel partner for our smart frames. We look forward to upgrading Target guests’ eyewear.”

Innovative Eyewear, which develops and retails smart eyewear under well-known brands such as Lucyd®, Nautica®, Eddie Bauer®, and very shortly, Reebok®, has achieved a step-change in revenue generation this year.

The company has outlined a growth strategy to focus on retail distribution in order to reach millions of consumers. Securing a listing on Target.com does just that.

Nvidia shares were down in the US premarket after the company reported eagerly anticipated quarterly earnings overnight. 

In many respects, Nvidia was set up to fail going into results. Simply beating analyst earnings expectations is not enough for Nvidia. Their importance to the AI trade means markets want to see the chip maker smash estimates by many billions, even if they doubled revenue compared to a year ago. 

“The most important earnings release in the entire history of the world – at least if you believe the hype beforehand – saw NVDA deliver both top- and bottom-line beats, coupled with better-than-expected third quarter guidance, as well as promising news on the delivery of the new ‘Blackwell’ chip,” said Michael Brown Senior Research Strategist at Pepperstone.

“While those at Nvidia earnings watch parties (bubble sign, perhaps!?) would’ve been pleased with the earnings slate, market participants appeared rather disappointed, with NVDA ending the after-hours session 7% softer, having failed to meet what, in hindsight, was an impossibly high bar that investors had set.”

The sharp ascent in the share price over the past two years means the investors are ultra-sensitive to any suggestion of a slowdown in momentum.

Nvidia trades at an earnings multiple considered to be rich compared to historical averages. With such a high valuation, earnings have to run higher faster just for Nvidia shares to stand still.

That said, there weren’t any major concerns with last night’s report and today’s drop is likely a round a profit taking after a meteoric rise in the stock.

“Revenue jumped 122% year-over-year to $30.04 billion, and its data centre revenue grew 154% to $26.3 billion, both smashing through estimates. Nvidia also announced an additional $50 billion buyback program, signalling its confidence in what’s ahead after ending the quarter with a massive cash balance of $34.8 billion,” Josh Gilbert, Market Analyst at investment platform eToro summarised.

As well as recent finanical performance, Nvidia provided insight into the rollout of its new Blackwell chips, saying it will sell billions of dollars in the coming periods. In addition, investors would have been encouraged to hear the Nvidia CEO in his traditionally bullish mood on last night’s earnings call, highlighting robust demand from the world’s largest tech companies.   

“The market may be disappointed not to see a bigger beat on its outlook given what is now almost unattainable expectations, but the bottom line here is that the long-term story remains intact, demand remains huge and the Juggernaut that is Nvidia rolls on,“ Gilbert said.