Purchases on St. Louis, above-expected Nvidia accounts give the sector breath again

(Il Sole 24 Ore Radiocor)- Tech and chip stocks lifted by the long wave caused by Nvidia, which on 25 February released its fiscal 2025 fourth quarter accounts with results above analysts' expectations. At Piazza Affari, acqusiit rewards Stmicroelectronics .

Until a few days ago, tech industry experts were holding their breath because the numbers of the US giant, which capitalises to the tune of $4.7 trillion, are considered the thermometer of AI-related business, which has been under scrutiny for weeks, with investors fearful that the outlook has been overstated. The CEO and founder of Nvidia, Jensen Huang, has reassured that 'demand for computing power is growing exponentially'. The fear, however, is that this demand is being met by a struggling supply chain and is also only being driven by hyperscalers. As eToro explained, all it takes is for one of the top cloud providers (i.e. Apple, Alphabet, Amazon, Microsoft and Meta) to 'start talking about discipline', that Nvidia suffers the consequences. That is, 'if hyperscalers are punished for fear of overspending, Nvidia risks being punished for fear that they will stop spending so much'.

Nvidia closed its fiscal fourth quarter with revenues of USD 68 billion (+73% year-on-year), against a consensus of around USD 66 billion. The guidance for the first quarter was fairly in line with expectations, but as in previous quarters, it does not incorporate any contribution from China, whereas trade has recently picked up.

Analysts at Equita commented that "the messages that emerged from Nvidia's conference call remain generally constructive for the supply chain exposed to the US group, but without elements that would substantially change the picture", with the market continuing to question whether the group's upstream chain is able to support Nvidia's and the market's demands. The analysts recall that the attention of investors in the Italia market is focused on Technoprobe, a company exposed to the AI business, and Stmicroelectronics, although the latter has "a more limited exposure at the moment to the world of data centres (only about 4% of expected revenues in 2026), but with interesting prospects thanks to the recent contract signed with Amazon". Mediobanca recommends a 'Neutral' on Technoprobe, fearing that the market is increasingly discounting optimism about artificial intelligence.