Business news live: Nvidia share price falls despite ‘monster’ profits as ‘politics has got in the way’

What’s next for the Nvidia share price then, set to open at around $178?

Hard to predict as always and most assessments should be taken with a pinch of salt – such is the rate of change – but plenty are forecasting target prices even higher.

Morgan Stanley lifted their target to $210, KeyBanc to $230, DA Davidson to $195, Truist to $228, Benchmark to $220 and Rosenblatt to $215.

The biggest of those suggests a further 29 per cent climb to come – but again, they are targets which frequently change and do not necessarily all have a successful hit rate.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, believes more share price movement will happen across the week rather than immediately after the results.

“Smart investors will look through the noise. Nvidia has a history of soft trading on earnings day, only to do all the heavy lifting after markets have had time to digest the results,” he pointed out.

Richard Hunter, Head of Markets at interactive investor, added that “the resumption of [chip] sales to China could leave the share price akin to a coiled spring, even after a stellar run”.

That’s due to some investors now seeing China sales as an “extra” to company guidance rather than built in, because of policy uncertainty.

It’s far from all about the negatives of course – this was still a huge report. And shares were up 3.5 per cent for the week ahead of last night’s numbers.

Kate Leaman, chief market analyst at AvaTrade, points out that usually this would be seen as a long-term success story:

“Nvidia just posted another monster quarter – revenue and earnings per share exceeded expectations, while the company also announced a jaw-dropping $60bn share buyback. That’s the kind of signal markets usually love as it says, ‘We’re confident. We’re here to stay’.”

Ms Leaman added that “the big picture is still intact” and that it showed AI is “a rising tide moment” for more firms than just Nvidia.

There could be more ahead, too, says IG’s Chris Beauchamp.

“The fact its shares have doubled since April mean that the bar was always going to be set pretty high,” he pointed out.

“The deliberate caution around China earnings means that the shares do have some room to go higher […] while not exactly full of fireworks, last night’s figures were perhaps enough to keep risk appetite supported.”

First we’ll look at the China aspect: restricted sales, a new deal signing over 15% of revenues to the US government and Beijing asking domestic firms to buy Chinese.

All of that has come in the last few months alone and certainly makes a difference.

Dan Coatsworth, investment analyst at AJ Bell, comments:

“AI demand is not the problem for Nvidia, it’s more how politics has got in the way of its grand ambitions for global domination.

“The company is stuck between a rock and a hard place. Nvidia has technology that countless companies are queuing up to buy, yet the US trade war has made it difficult to sell whatever it wants into China.

“Comments on Nvidia’s latest earnings conference call reveal that such sales have yet to restart.

“Nvidia seems to be shaking its head in frustration as its hands are tied with regards to the China situation. Chief executive Jensen Huang says China would be a $50 billion opportunity for Nvidia this year, with the potential for 50% annual growth if it were able to sell what it wants.”

Some reaction coming up to Nvidia’s earnings, ahead of the market reopening in the US this afternoon.

To recap, in financial terms last night’s report was a huge one – $46bn revenues, $1.05 earnings per share and so on. It hit every target and then some, with the exception of data centre revenue and H20 chip sales to China.

The outcome was a share price drop, however – 1.6 per cent in futures markets, not a spectacular fall by any means, but an indication that perfection is demanded for a $4tn company.

So what are the experts saying?

Sales at Elon Musk’s Tesla have fallen by a shocking 40 per cent in Europe amid increased pressure from Chinese rivals in the electric vehicles (EVs) industry.

New data from the European Automobile Manufacturers’ Association (ACEA) shows EV sales rose by more than a third in July (33.6 per cent), meaning that combined with Tesla’s own drop in sales, the company’s market share has dropped to below one per cent.

More details – and the big winners this year so far – here.

This shift, which will see approximately 60 per cent of its grocery range priced at £1, follows a successful five-month trial across 17 stores in the West Midlands.

The company stated the change marks a return “back to its roots” and signifies “the end of additional price complexity”, with similar simplified pricing planned for general merchandise and clothing in the coming months.

An unexpected benefit of the trial was a significant reduction in shoplifting, with incidents falling by over a quarter.

The owner of TikTok, ByteDance, is to hold a share buyback scheme for employees which will see the firm valued at more than $330bn (£244bn).

It’s expected that employees will be offered just over $200 per share, more than 5 per cent higher than a similar offering six months ago.

The offer will go live in autumn according to reports.

It earned greater revenues than Meta in the first quarter of this year, making it the world’s biggest social media firm.

TikTok was supposed to be sold by January after a presidential intervention by Donald Trump but he has backed down to offer extensions multiple times, with the latest running to 17 September.

Lidl is poised to create more than 500 new jobs across the UK as part of a significant £435 million investment in its logistics infrastructure, which includes the completion of a major expansion at its London site and the commencement of construction on a new warehouse in Leeds.

The German-owned supermarket chain confirmed the £285 million redevelopment of its Belvedere warehouse in London, which involved the construction of a second building, effectively tripling the site’s capacity.

This expanded facility is expected to serve 120 stores once fully operational. Concurrently, Lidl has begun work on a new £150 million warehouse in Leeds.

These combined developments are projected to generate more than 500 new roles, with 120 positions in London and 400 in Leeds.

Reports suggest Costa Coffee could be on the market for around £2bn.

That’s half of what it was bought for six years ago but coffee sales in the UK are below the level now from when Coca-Cola bought it.

There are more than 2,000 stores in the UK and Costa operates across 50 different countries, though Coca-Cola have not released figures on total stores or employees worldwide.

Costa has about 38% of the UK coffee market share according to research, but it is under pressure from cheaper alternatives like Gregg’s, and more upmarket offerings such as local specialist coffee boutiques or independent cafes.

Add in increased employer costs this year in the UK and it’s clearly a tough time for many businesses right now – though it’s still one which recorded revenues of £1.2bn in 2023.

Costa Coffee is a UK high street staple. You see it pretty much everywhere: main shops, inside shopping centres, even within petrol stations in a tiny kiosk or machine.

But it’s not a standalone company; Costa was bought by Coca-Cola in 2019 for nearly £4bn.

Since then the drinks firm has struggled to integrate it properly within its wider ecosystem and doesn’t feel the brand is generating the return it wanted. So, it’s up for sale – potentially at least, as one of several possible outcomes of a review.

At present there are three main parties who seem to be at least exploring a deal.

Apollo Global Management is the eventual parent of restaurants like Wagamama, and Bar Burrito.

KKR is a US-based private equity firm who have also held early talks, according to reports.

And Sky News initially reported a “small number” of firms who may have had exploratory talks.

There’s still a chance a sale doesn’t go through, but bids are expected in October.