Nvidia reported sharply rising sales and profit in its latest quarter that showed spending on its chips continues to soar despite jitters about the outlook for the AI boom. Nvidia brought in $11 billion of revenue from its new Blackwell AI chips, the company said in its earnings report Wednesday, making good on a prediction last year that sales would be strong. The new chips made up nearly a third of the revenue in Nvidia’s data center division for the quarter. Underpinning the buying surge, Chief Executive Jensen Huang cited a shift in AI toward “reasoning” models that require more computing power as they use their digital brains to think through their answers. Nvidia said sales rose 78% to $39.3 billion in the quarter. Net income rose 80% to $22 billion. Both figures came in ahead of Wall Street’s expectations in a FactSet survey of analysts. Nvidia projected around $43 billion of sales for its current quarter, exceeding analyst expectations of about $42 billion. Nvidia shares lost 1.5% in after-hours trading. The stock was down about 2% this year through Wednesday’s close, after surging by more than 800% over the preceding two years. Nvidia’s shares fell 17% in one trading day late last month, erasing more than $590 billion market value. Nvidia’s continued success hinges in large part on Blackwell, its latest generation of AI chips that are just starting to roll out. The company said in November it expected several billion dollars of revenue from Blackwell chips in its latest quarter, suggesting demand and production were healthy despite a manufacturing hiccup the company flagged last year.

The Swiss stock market performed well on Wednesday. The SMI gained 0.1 per cent to 13,043 points and reached another record high. Of the 20 SMI stocks, there were 15 price gainers and four price losers, with one share closing unchanged. A total of 26.98 (previously: 27.92) million shares were traded. The SMI was led by Alcon, which closed 5.4 per cent higher. The ophthalmology specialist impressed with its figures for the fourth quarter of 2024 and its outlook for the current year. Nestlé (-1.6%) saw investors take profits after the surge of the previous trading days. Novartis (-3.7%) was burdened by press reports that the Sandoz family foundation had significantly reduced its stake in the pharmaceutical company. The share price of reinsurer Swiss Re climbed 3.8 per cent in the wake of Munich Re. Shares in the construction sector recorded significant increases and were among the leading winners across Europe. Geberit, Holcim and Sika advanced by up to 2.4 per cent. European investors also flocked to bank shares. In Switzerland, UBS shares soared by 2.2 per cent. Among small caps, Adecco jumped 12.3 per cent after the personnel services provider presented its figures for the first quarter. Docmorris jumped 9.4 per cent without any news.

Europe
The European stock markets closed sharply higher on Wednesday, as investors shrugged off another series of corporate results and kept a close eye on developments in the Ukraine. The Stoxx Europe 600 index gained 1% to 559.7 points. In Paris, the CAC 40 and SBF 120 advanced by 1.2% and 1.1% respectively. The DAX 40 added 1.7% in Frankfurt, while the FTSE 100 edged up 0.7% in London. WORLDLINE (-17%): the electronic payments specialist announced that it expects sales to rise only slightly in 2025, after posting results last year that fell short of expectations. STELLANTIS (-4%): the carmaker forecast on Wednesday a return to profitable growth and positive industrial free cash flow in 2025, after its results suffered particularly last year from inventory reduction measures. Stellantis is set for a challenging 2025, according to JPMorgan. MEDINCELL (+9.3%): the US Food and Drug Administration (FDA) has accepted the application to extend the indication of the biotechnology company's antipsychotic Uzedy for the treatment of patients with type 1 bipolar disorder.

United States
Major U.S. stock indexes were mixed. The Dow Jones Industrial Average fell 0.43%. The S&P 500 was flat. The Nasdaq Composite edged up 0.26%. Bitcoin prices sank, with the cryptocurrency on pace for its worst monthly performance since June 2022. Stocks were marching higher but walked back gains after President Trump said that the U.S. is considering 25% tariffs on the European Union. The president also defended billionaire adviser Elon Musk and said that the federal workers who do not respond to an email asking what they accomplished last week could be fired. Investors have weighed a slew of economic data and headlines out of Washington in recent trading sessions, leading some to reconsider richly priced tech shares and other riskier assets. Artificial intelligence stocks like Super Micro Computer and Vistra regained some lost ground, ahead of a pivotal earnings report from Nvidia due after the close. Nvidia’s financial results have become a major market event, with the chipmaker’s stock moving 6% or more the day after reporting in three of the last four quarters. Given Nvidia’s size, many investors expect Wednesday’s report could help direct markets in coming sessions. Investors expected to see big growth in Nvidia’s revenue and earnings but are also looking for any commentary about competition and politics. Nvidia’s chips have been embroiled in the U.S.-China standoff, while its stock has been rattled by the emergence of Chinese AI startup DeepSeek. Tesla shares slid 3.96%. The stock is on pace for its worst month in more than two years.

Asia
Stocks in Asia mostly fell on Thursday. While the Japanese Nikkei 225 index fell only slightly to 38,130 points, the drop in Hong Kong was much greater at 1.3 per cent. Profit-taking is likely to play a role here after the Hang Seng Index shot up by over 3 per cent the previous day, led by technology stocks. In Shanghai, the Composite Index dropped by 0.7 per cent. In Seoul, the Kospi lost the previous day's gains with a fall of 1.0 per cent. Chip stocks in the region were mixed after the Nvidia figures. In Seoul, SK Hynix declined by 1.7 per cent. The share had opened upbeat but turned negative with the issue of bonus shares. Samsung Electronics is trending slightly upwards. In Tokyo, Advantest lost 2.5 per cent, while Toyko Electron rose by 0.8 per cent and Renesas by 2.4 per cent.

Bonds
The 10-year U.S. government debt yield dropped 4 basis points (0.04 basis point) to 4.26%. The 2-year Treasury note yield slipped by one basis point to 4.08%. U.S. government debt rallied on more tariff threats by President Donald Trump on Wednesday, reigniting economic fears and sending the policy-sensitive 2-year Treasury yield to its lowest level in four months.

Analysis
Target price Dormakaba: Berenberg upgrades to CHF 862 (813) - Buy
Target price Landis+Gyr: JP Morgan lowers to CHF 58 (76) - Neutral
Target price Lonza: UBS raises to CHF 650 (630) - Buy

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