Equities Update: Wizz Air, Nvidia, National Grid..

AI powers Nvidia to new heights with revenue surge

Josh Gilbert, Market Analyst at eToro, said: “Nvidia has delivered once again. Jensen Huang and his team are taking full advantage of the artificial intelligence boom, reporting revenue and earnings well above forecast while upgrading its second-quarter guidance. Data centre revenue jumped by more than 400% in the quarter to a huge USD$22.5 billion. 

“The result today once again underscores that there is continued demand for AI, and that demand is showing no signs of abating. Companies are continuing to increase their capital expenditures, particularly big tech, to keep up with this revolutionary technology, and Nvidia is by far the biggest beneficiary. The exciting prospect for investors is that it feels like AI is just getting started. 

“Not only is Nvidia rewarding its shareholders, it’s one of the main profit growth drivers of the S&P500. It’s supporting broader technology stocks, and this result will likely lay the groundwork for another record high from the S&P500. Valuation question marks will remain, but there is no denying the growth that Nvidia continues to deliver. 

2To add to another stellar report, Nvidia announced free cash flow of USD$14.93 billion, up 461% year-over-year, resulting in a 150% increase in its dividend. With shares now topping the USD$1000 mark in after-hours trade, the business has also announced a 10-1 stock split to ensure the stock remains accessible for investors and should only improve sentiment.”

National Grid announces £7bn capital raise via rights issue

Adam Vettese, analyst at investment platform eToro, says: “Ordinarily a steady-eddie defensive stock, National Grid is where investors might seek to put cash they wish to shield from volatility or market uncertainty, which there has been plenty of in the last couple of years. Today’s announcement of a $7bn capital raise via a rights issue as part of a wider £60bn 5-year plan is a huge step up in investment with the vast majority going into electricity networks.

“Underlying operating profit was up 4% although some one-off exceptional charges contributed to EPS taking a hit, which perhaps backs up the case that this investment is needed to drive growth and deliver value for shareholders. The dividend is set to increase in line with policy despite this. Understandably this and the dilution effect of the rights issue have led their share price to plunge 6.5% this morning. Will investors see this however as short-term pain for longer-term gain?”

Record passenger numbers propel Wizz Air back into profit 

Mark Crouch, analyst at investment platform eToro, says: “Wizz Air has soared back into profit after what’s been three gruelling years for the airline and their shareholders. The Hungary-based airline reported net profits of 366 million euros, compared with a net loss of 535 million euros a year earlier.

“Record passenger numbers amid surging demand, improving load factors and lowering unit costs have all played their part in propelling the airline back to profitability. 

“There is though, an air of what might have been. Disruption caused by the conflicts in Ukraine and the Middle East has significantly impacted the company’s bottom line with thousands of flights cancelled. And the ongoing problems of production hiccups with their Pratt and Whitney engines is another headwind the low-cost carrier could do without. 

“With the summer season just around the corner, Wizz Air would have wanted all their ducks in a row heading into such a crucial period. Yet despite receiving significant compensation for the disruption, many of their planes will be grounded with 20% of the fleet affected by the engine troubles.”