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By Swissquote Analysts
Published on 09.08.2022
Morning news

Nvidia Warns of Sales Shortfall as Gaming Revenue Drops

Topic of the day

Nvidia Corp. said second-quarter sales would fall well short of its forecast amid a drop in gaming revenue in recent weeks, the latest sign that the pandemic-era boom for computer chips is waning. The Santa Clara, Calif., -based company expects revenue of $6.7 billion for the quarter ended July 31, some 17% below the $8.1 billion it had forecast in May, amid a 33% drop in gaming revenue to $2.04 billion. Sales would still be up from the year-prior period, though they would mark the slowest pace of growth in three years. It was also below Wall Street expectations. Analysts polled by FactSet, on average, were expecting total revenue of $8.12 billion and gaming revenue of $3.09 billion. Chief Executive Jensen Huang said gaming revenue declined significantly as the quarter progressed and the company is adjusting prices and inventory levels in response. "As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our Gaming partners to adjust channel prices and inventory," he said. Nvidia shares fell 8% in morning trading Monday. The stock has retreated more than 38% this year.

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Swiss stocks

The Swiss stock market ended the first trading day of the new week with gains. The SMI improved by 0.4 per cent to 11,166 points. Among the 20 SMI stocks, 16 gained, 3 lost and 1 share closed unchanged. 25.05 (previously: 25.1) million shares were traded. The news situation on the corporate side was clear at the beginning of the week. In the meantime, the reporting season was largely over, said one participant. Banking stocks were among those in demand, with UBS and CS Group up 1.6 and 2.2 per cent respectively. Barry Callebaut shares fell 0.7 per cent. The chocolate maker has partially resumed production at its plant in Belgium, which was closed due to salmonella. More production lines are to be restarted in the coming weeks. Salmonella had been discovered at the Wieze plant at the end of June. The Bucher share fell 0.1 per cent to 355 francs.

International markets


European equity indices recovered on Monday the ground lost on the eve of the weekend, helped by bargain buying in low volumes. Investors are awaiting the release of US inflation figures on Wednesday to determine the size of the next rate hike by the US Federal Reserve. The Stoxx Europe 600 index rose 0.7 percent to 438.9 points. In Paris, the CAC 40 and SBF 120 gained 0.8% each. The DAX 40 in Frankfurt gained 0.8% and the FTSE 100 in London rose 0.6%. United Parcel Service Inc. agreed to acquire Italy’s Bomi Group, as the transportation giant looks to bolster its medical-product-distribution business. UPS didn’t disclose the sale price. The Wall Street Journal previously reported that the deal was worth several hundred million dollars, according to people familiar with the matter. Founded in 1985, closely held Bomi distributes a range of medical products such as imaging equipment, biological samples and pharmaceuticals to hospitals, clinics, laboratories as well as to patients’ homes. It operates in Europe and Latin America. Veolia Environnement SA said Monday that it will sell Suez’s U.K. waste business to Macquarie Group Ltd. in a 2.4 billion euros ($2.44 billion) deal. The French utility said in June it would sell the business to satisfy the U.K.’s antitrust watchdog—the Competition and Markets Authority—which had expressed concerns over the harming of competition in the supply of water- and waste-management services in the country. The sale proceeds represent around 17 times 2021 normalized earnings before interest, taxes, depreciation, and amortization, Veolia said.

United States

U.S. stocks wavered Monday as investors reviewed a series of earnings reports for insight into the impact of higher inflation on companies and consumers. The S&P 500 fell 5.13 points, or 0.1%, to 4140.06. The Nasdaq Composite retreated 13.10 points, or 0.1%, to 12644.46 after spending much of the afternoon hovering between gains and losses. The technology-heavy index earlier flirted with a potential exit of its bear market. The Dow Jones Industrial Average added 29.07 points, or 0.1%, to 32832.54 points. Stocks have swayed in recent days, buffeted by shifting views on central bank policy. Friday's better-than-expected jobs report divided investors and analysts. Some raised concerns that the Federal Reserve could continue raising interest rates aggressively, while others questioned whether the U.S. economy could really be in recession. Tesla's stock added $6.76, or 0.8%, to $871.27. The U.S. Senate passed a bill on Sunday to spend billions of dollars on climate, including the extension of a tax incentive for electric vehicles. Shares of Signify Health jumped $2.18, or 11%, to $22.05 after The Wall Street Journal reported that drugstore chain CVS Health is planning to bid for the company. Shares of Global Blood Therapeutics rose $2.76, or 4.3%, to $66.60 after Pfizer agreed to buy the company for $5.4 billion.


The Asian stock exchanges are mainly showing moderate gains in late trading on Tuesday. Only Tokyo is out of the ordinary with more significant losses. While trading in Singapore is suspended for the National Day holiday, indices in Shanghai and Hong Kong are rising. In the Chinese heartland, prices turn positive with tailwinds from the renewable energy sector, but coal stocks are also supporting. Electricity stocks, on the other hand, are rather weak. Shanxi Securities speaks of overall resistance that is slowing the way up. The analysts point to the increasing tensions around Taiwan and the cooling of the Chinese economy. In addition, new surveys show that Chinese inflation is expected to pick up in July.


The yield on the U.S. benchmark 10-year Treasury note edged down to 2.763% from 2.838% on Friday. The inverted yield curve continued to flash a recessionary signal, with the two-year yield at 3.214%.


UBS lowers Bucher target to 456 (499) CHF – Buy

HSBC lowers Eon target to EUR 11.30 (12.40) – Buy

BoA lowers Allianz target to EUR 245 (250) – Buy

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