US OPEN: Lack of enthusiasm around Nvidia's Q4 outlook drags tech stocks down

• Mixed Thursday on for the US stock market
• Nvidia’s down 2% following a moderate Q4 outlook
• Snowflake surges 30% on product revenue guidance 

Wall Street opened in a mixed mood after yesterday’s long-awaited Nvidia Q3 results. The AI’s revolution key player has topped the analysts’ estimates, though it is once again the next quarter outlook, which makes the investors question the real added value of the ongoing AI craze. As a result, we observe a ricochet of losses on other major Big Tech and AI companies. Nasdaq slides down the most today (-1.05%), followed by S&P500 (-0.3%). Russell 2000 and Dow Jones are currently in the green, gaining 0.5% and 0.17% respectively.

Volatility currently observed on the US stock market. Source: xStation5

US100 (H4)

Nasdaq, represented by the US100 contract, shows a bearish bias, with the price trading below both the 20 and 50 EMAs, and a recent break below the 50% Fibonacci retracement level. Immediate support is at the 61.8% Fibonacci level (20522.46), and if this breaks, the next target is the 78.6% level (20257.40). A recovery above the 50% retracement (20662.46) could shift the trend towards the upside. The MACD indicator suggests increasing bearish momentum, supporting the potential for further downside. 

Source: xStation5

Corporate news:

• Nvidia (NVDA.US) shares are down 2% due to the not overly rosy Q4 2024 outlook. The company assured investors that its new product lineup will help to maintain the AI-fueled growth, though it admitted the challenges related to supplying new Blackwell and Hopper chips.
  • Revenue: $35 billion (+112% YoY, expected: $33.1 billion)
  • Net income: $19.31 billion (+111% YoY)
  • Earnings Per Share (EPS): $0.78 (expected: $0.75)
  • Data Center Revenue: $30.8 billion (+112% YoY, +17% QoQ, expected: $29.14 billion)
  • Gaming Revenue: $3.3 billion (+15% YoY, +14% QoQ, expected: $3.06 billion)
  • Gross Margin: 75% (-1pp QoQ, in line with expectations of 73.5%)
  • Q4 revenue outlook: $37.5 billion (+7% QoQ, weakest pace since 2023)
• Baidu (BIDU.US) shares slide down 7.2% after the company reported a 3% decline in sales in Q3, mainly due to sluggish Chinese demand. The severe declines in traditional online marketing revenue have been partially offset by the growth in the AI Cloud business. 
  • Revenue: $4.78 billion (-3% YoY, expected: $4.69 billion)
  • Earnings Per ADS (Adjusted): $2.37 (expected: $2.35)
  • Online Marketing Revenue: $2.68 billion (-4% YoY)
  • Non-Online Marketing Revenue: $1.10 billion (+12% YoY, driven by AI Cloud)
  • IQIYI Revenue: $1.03 billion (-10% YoY, expected: $1.02 billion)
  • Adjusted EBITDA Margin: 26% (-200 bps YoY)
  • R&D Expenses: $765 million (-12% YoY)
  • SG&A Expenses: $836 million (+2% YoY)
• Snowflake (SNOW.US) shares ramp up 30% after the reported product revenue outlook for Q4 2024 topped analysts’ estimates, suggesting a strong reception of new products. The enthusiasm is further backed up by the company’s strategic decisions, such as the acquisition of Datavolo’s data integration platform and collaboration with Anthropic, an Amazon-backed AI company, aiming at the integration of Claude large language models into Snowflake products, which would further enhance their AI capabilities. 
  • Revenue (Q3): $942.1 million (+28% YoY, expected: $900.3 million)
  • Adjusted Net Income (Q3): $73.31 million (expected: $55.31 million, previous year: $89.73 million)
  • Product Revenue Guidance (Full Year): $3.43 billion (expected: $3.39 billion)
• Palo Alto Networks (PANW.US) shares lose some ground (-1%) after reporting Fiscal Q1 2025 results and providing a somehow underwhelming revenue guidance for the rest of the year. Nevertheless, the company underlined that the rise in cybercrime continues to drive the demand for Palo Alto’s services and put an emphasis on their strategy to combine existing tools within a single platform.
  • Revenue (Q1): $2.14 billion (expected: $2.12 billion)
  • Adjusted Earnings Per Share (Q1): $1.56 (expected: $1.48)
  • Revenue Guidance (Q2): $2.22 billion to $2.25 billion (expected: $2.23 billion)
  • Full-Year Revenue Guidance: $9.12 billion to $9.17 billion (expected: $9.13 billion)
  • Adjusted Net Income Per Share Guidance (Full Year): $6.26 to $6.39 (previous: $6.18 to $6.31)
• MicroStrategy (MSTR.US) stock is down 3.2%, following a 14% surge during the pre-market trading after the company raised its planned convertible bond offering to $2.6 billion, signaling plans for additional Bitcoin purchases. Investors responded at first positively, valuing the firm's growing Bitcoin reserves, which have reached 331,200 coins amid Bitcoin's meteoric rise above $97,000, though the abrupt rise seems to have quickly concluded in a profit realisation.

Individual company news for the 40 most active S&P 500 stocks. Source: Bloomberg Finance L.P.