Prysmian and ST in the spotlight on the Milan Stock Exchange ahead of Nvidia’s results

(Il Sole 24 Ore Radiocor) - Tech shares are surging on European markets, whilst the countdown has begun for chip giant Nvidia’s quarterly results – a crucial test of the resilience and prospects of AI. Consequently, in Milan, Prysmian, which is linked to artificial intelligence infrastructure, and Stmicroelectronics, and, outside the FTSE MIB, also Technoprobe and Wiit. Meanwhile, in Frankfurt, Infineon Technologies is leading the gains, whilst in Amsterdam ASML and ASM International.

In fact, the day had begun on a very different note for the sector, with the massive sell-off that swept through Wall Street’s tech shares overnight and Asian tech shares this morning. Then, in the final stages of the session, ‘the sector changed course’, explain the experts at Daiwa Securities, following the lead of South Korea’s Kospi. Among the market’s heavyweights – which ended the day up 0.68 per cent, pulling the Nikkei up 0.53 per cent as well – SK Hynix managed to close the session up 0.4 per cent, whilst Samsung recouped its losses, finishing up 0.49 per cent.

Futures on Wall Street also changed direction, with the Nasdaq 100 – the US index most closely linked to the tech sector – recovering after falling by 0.97 per cent the previous day, thanks to Nvidia’s rebound. The Californian chip giant (which closed 2.91 per cent down the previous day), on the other hand, is coming off the back of seven consecutive sessions of losses on the stock market – its longest losing streak since 2022 – with investors trimming their positions in the stock ahead of its quarterly results, due on Wednesday 26th.

Investors will be scrutinising the Santa Clara-based company’s earnings “in search of clues as to whether the boom in artificial intelligence hardware – or the resulting rise in profits – is losing momentum”, according to HSBC. In particular, explains MPS, the spotlight will not be focused solely ‘on the latest quarterly figures’ (although earnings per share – which have consistently exceeded expectations in the last eight earnings reports – will be under scrutiny). But “above all on forward-looking guidance and AI-related demand”. In particular, revenue guidance for the third quarter – for which the most optimistic analysts are setting the bar between 107 and 108 billion dollars – will be worth watching, as will updates on the business with China. On the infrastructure front, guidance on the launch timeline for the Vera Rubin advanced AI supercomputing platform – which will replace the hugely successful Blackwell – will be crucial, as will guidance on the expected trajectory for gross margin and the growth in operating costs.

As for quarterly turnover, however, analysts expect it to almost double to around $92 billion, with full-year earnings forecast to be between $103 billion and $105 billion. “These are very high expectations to meet,” said Fabien Yip, a market analyst at IG “However, judging by Nvidia’s track record, it wouldn’t be surprising if the company met its key figures, but I think the most important point is that people are trying to work out whether there are concerns about the circular operations fuelling its growth and whether that rate of growth is sustainable in the coming quarters.”