Anticipation over Nvidia overshadows Russia risk

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Anticipation over Nvidia overshadows Russia risk

Nvidia H100 chips inside a server room at the Yotta Data Services Pvt. data center, in Navi Mumbai, India, on Thursday, March 14, 2024. 

Dhiraj Singh| Bloomberg | Getty Images

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Russia warns of nuclear response  Ukraine “struck a facility in [the] Bryansk region” of Russia using six U.S.-made missiles, said Russia’s Ministry of Defense. CNBC was unable to independently verify the reports. On Tuesday, Russian President Vladimir ****** updated the country’s nuclear doctrine, expanding the circumstances that would warrant a response using nuclear weapons. 

Markets recovered from jitters  U.S. markets mostly closed higher on Tuesday after dipping in response to news of heightened geopolitical tensions. Shares of Super Micro Computer jumped 31%. The pan-********* Stoxx 600 fell 0.45%, closing at its lowest level in more than three months. Meanwhile, Eurostat confirmed that the euro zone’s annual inflation was 2% for October. 

New billion-dollar business for Qualcomm Qualcomm expects to make an additional $22 billion per year by 2029, the chipmaker announced at its investor day on Tuesday. PC chips, which Qualcomm launched just earlier this year, will contribute $4 billion in sales, Qualcomm said. It’s part of CEO Cristiano Amon’s push to diversify away from Qualcomm’s smartphone chip business. 

Venture funding for Europe stabilizing Europe’s startups are expected to secure $45 billion in investments from venture capital firms by the end of 2024, said VC firm Atomico. That’s a drop from the $47 billion last year, but Atomico thinks the funding situation in Europe has “stabilized.” The entire ********* tech ecosystem could be valued at $8 trillion by 2034, predicted Atomico.  

[PRO] S&P has room to grow in 2025 Goldman Sachs sees the S&P 500 reaching 6,500 in 2025, implying an upside of almost 10% from Tuesday’s close, on the back of a strong U.S. economy and expanding corporate margins. The bank’s team of equity strategy analysts, led by David Kostin, recommends five strategies to capitalize on the S&P’s growth next year.  

The bottom line

Investors briefly sought refuge in safe haven assets like gold and bonds on increased geopolitical tensions: Russia reported that Ukraine had struck the country with U.S.-made missiles, and signaled it’s ready to respond with its nuclear arsenal.  

“The conflict is escalating … I clearly expect to see some kind of immediate reaction, knee-***** reaction,” Tiffany McGhee, CEO and CIO of Pivotal Advisors, told CNBC. 

That evacuation into less risky assets was only temporary, however. Stocks fell briefly on the news, but most U.S. indexes recovered to close higher on Tuesday. The S&P 500 added 0.4% and the Nasdaq Composite gained 1.04%, though the Dow Jones Industrial Average dipped 0.28%. 

It seems that once investors digested those geopolitical events, they decided other factors were more important to the markets. As McGhee pointed out, “This is year three of the conflict and while initially we saw spikes in prices … that’s kind of leveled off,” she said. 

One of those factors is Nvidia’s earnings, out tomorrow. Anticipation for the report is so great that the chipmaker’s shares soared 4.9%.  

Indeed, the options market is saying that Nvidia’s earnings will move the S&P more than U.S. jobs data, inflation readings or even Federal Reserve meetings, wrote Gonzalo Asis, equity-linked analyst at Bank of America Securities.  

And investors won’t just be looking at Nvidia’s sales for the previous quarter. They’ll want to know if the chipmaker’s next-generation Blackwell chips can sustain – or even cement – Nvidia’s dominance in the artificial intelligence chip industry. Last month, CEO Jensen Huang described demand for Blackwell as “insane,” but worries bubbled up yesterday over a report that stated the chip overheats in custom servers. 

Past results aren’t an indication of future performance. That’s something every investor knows. Considering Nvidia’s performance over the past two years, however, it’s hard to think of any other asset that will give investors the same sense of safety. 

— CNBC’s Ruxandra Iordache, Katrina Bishop, Brian Evans, Samantha Subin and Pia Singh contributed to this report.          

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