Equities Update: Nvidia, Alibaba, JD Sports, Hochschild, Prudential, Bunzl…

Markets brace for Nvidia earnings amid soaring AI demand

Josh Gilbert, market analyst at eToro, says: “In the same way Apple symbolised the smartphone era, Nvidia now defines the AI era. The stock has become the heartbeat of the market, making up around 8% of the S&P500 weight, the single largest in history. Its market cap now eclipses the entire FTSE 100 and the ASX200, and is even larger than the entire global crypto market, underscoring just how outsized its role has become in global markets. That scale underlines why its earnings dates are fast becoming just as vital to investors as economic and central bank data. Regardless of whether you own Nvidia shares or not, its result will impact your portfolio in some way.

“Its last earnings in May solidified its position with continued growth, margins most businesses would envy, and a war chest that gives the company the firepower to keep innovating. Demand remains robust, and while there are some bumps in the road due to US tariffs, issues with the Chinese government and a short-term halt on H20 chip production, confidence in the company persists. Though the H20 chip halt will come with short-term uncertainty, demand from US hyperscalers and adoption of its Blackwell chips will likely offset weakness in China.

“Profit margins will be a focal point this week, after dipping slightly due to the Blackwell build-out. Last quarter’s heavy investment in ramping up next-gen chips trimmed gross margins by a few percentage points, but with adoption growing, margins are set to rise again.

“In the current quarter, US mega caps have ramped up capital expenditure on AI following another round of strong results, and much of that investment is set to flow straight to Nvidia. That bodes well not only for this week’s earnings, but also for the company’s outlook in the quarters ahead. It’s in a highly enviable position as the go-to hardware manufacturer, and that’s not likely to change anytime soon. Even with the stock trading at a premium valuation, investors continue to pay up on the expectation that Nvidia will keep delivering on AI growth. The market is expecting EPS of USD$1.01 (48% YoY) on revenue of USD$46.1 billion (54% YoY).

“Nvidia may be the market’s heartbeat, but that comes with the expectation of perfection, meaning even the smallest disappointment could spark outsized volatility across broader markets, not just Nvidia shares. But investors will likely see weakness as an opportunity, given the AI boom feels like it’s only just getting started.”

Alibaba Earnings Preview

Lale Akoner, global market analyst, says: “Alibaba reports its earnings results against a backdrop of intensifying competition in e-commerce and rising investment in Cloud and AI. Consensus expects mid-single-digit revenue growth in core commerce, with subsidy-driven promotions boosting transaction volume but pressuring margins. Investors will watch closely for updates on the RMB50bn consumption support program and its impact on customer acquisition in quick-commerce and grocery.

“The spotlight remains on AliCloud, where the street expects topline re-acceleration of 20%+, which, combined with its higher-margin profile, is expected to partially offset e-commerce headwinds. Capital expenditure is likely to remain elevated as Alibaba scales AI infrastructure, but the group’s RMB600bn cash balance provides ample flexibility.

“Key questions for the quarter: Will subsidies drive sustainable market share gains? How resilient are margins under competitive pressure? And can Cloud earnings momentum confirm Alibaba’s positioning as a structural AI “shovel seller”?”

JD Sports running against sliding sales

Adam Vettese, market analyst for eToro, says: “JD Sports’ trading update paints a challenging picture for the retailer, with underlying group sales down 3% in Q2 and the UK declining even more sharply at 6%. While management is pressing ahead with a £100m share buyback and profitability guidance remains steady, the weakness in like for like sales across core markets highlights tough consumer conditions and competitive pressures. In particular, the potential for increased US tariffs represents a significant risk to margins and future earnings, adding to the cautious tone.

“Growth from new stores and decent apparel performance have helped soften the impact, but with sales under pressure and uncertainty around footwear launches, investor sentiment is likely to remain subdued until clearer signs of recovery emerge. Shares have opened well this morning but there is still a long way to go, they were 60% higher than here only one year ago.”

Asian markets prove to be the driving force for “The Pru”

Mark Crouch, market analyst for eToro, says: “Prudential’s new strategy launch in 2023 may have seemed ambitious, shifting focus to Asian and African markets just as global sentiment wobbled. But less than two years in, the latest results suggest it was a calculated, well-timed shift. Double digit growth in profits, new business and dividend returns have been driven by Asia’s powerful structural tailwinds.

“The Pru appears perfectly positioned in the right markets at the right time. A rising middle class, increasing incomes, and underpenetrated insurance markets across Asia offer a long runway for expansion. That’s translating into real-world outcomes, with stronger operating metrics, rising profitability, and more capital being returned to shareholders.

“Insurance, by nature, is a highly cash-generative business, and Prudential is proving just how powerful that model becomes when paired with initiative and scale. Investors, it seems, are starting to take notice, with shares up over 50% in 2025 as recognition of the underlying value builds. The announcement of an additional $1.1bn in share buybacks suggests the share price may not be done climbing.”

Hochschild on the edge of breaking out after gold price surge propels revenue 

Mark Crouch, market analyst for eToro, says: “Despite a supportive gold price environment, Hochschild Mining faces renewed investor disappointment after slashing its full-year production forecast from the Mara Rosa mine by more than half. This downgrade follows a temporary suspension of the site due to lacklustre output, underscoring persistent operational challenges that continue to weigh heavily on sentiment.

“Yet Hochschild remains stuck below a decade-long resistance level, with ongoing concerns around jurisdictional risks and permitting hurdles further complicating its outlook. While major gold producers are largely priced more in line for today’s bullion levels, attention is shifting toward smaller, higher-leverage miners. Hochschild’s improving fundamentals and attractive valuation keep it on investors’ radar, but the persistent operational setbacks and external risks temper enthusiasm.”

Execution and cost pressure weighs on Bunzl bottom line

Adam Vettese, market analyst for eToro says: “Bunzl’s half year performance reflects a business currently contending with a challenging operating environment. Despite revenue rising 4.2% at constant currency driven by acquisitions, underlying growth remains broadly flat. The headline operating margin declined from 8% down to 7% as execution headwinds in North America and cost pressures in Continental Europe weighed on profitability.

“Despite this, Bunzl has taken decisive steps to drive improvement, including leadership changes, cost savings, and a focus on higher margin own brand products, with early indicators of progress already showing through. The groups acquisition pipeline remains strong five deals completed year to date and digital transformation continues to underpin operational efficiency. With leverage managed at 1.9x EBITDA and the share buyback programme resumed, Bunzl’s financial position is solid, even as the dividend only nudged up by 0.5%.

“Looking ahead, management expects margin moderation to improve in the second half as strategic actions materialise. While near term earnings are under pressure, Bunzl’s resilience and disciplined expansion provide confidence in its ability to overcome these issues and aim to see shares pare the losses made this year.”