Nvidia Shows ‘Em: Explosive Results Boost Nervous Market

If anyone doubted that tech stocks are the place to be, chipmaker Nvidia Corp.’s blowout results Wednesday, released after the market’s close, put a rest to that. The company’s stock vaulted 7% in after-hours trading.

Benefiting from its strong presence in the artificial intelligence semiconductor market, Nvidia posted $5.16 in adjusted earnings per share on revenue of $22.1 billion for its fourth quarter, way north of analysts’ consensus, from a Bloomberg survey, of $4.60 on $20.4 billion. Results were also stunning for the whole fiscal year, ending January 28, with EPS up 486%, versus the comparable period.

The nervousness about Nvidia that pulled the market into the red on Tuesday continued into Wednesday, with the Invesco QQQ Trust, an exchange-traded fund that is a benchmark for hot tech stocks, falling 0.4% by the close. After the earnings release, the QQQ leapt almost 1%.

Perhaps a feeling of this-is-too-good-to-be true had gripped investors before the release. Nvidia, which had advanced 40% this year, slipped 2% in Wednesday trading. The S&P 500 was also down for much of the day, closing up 0.13%, then rallied after hours.

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The company’s shares have done well over time, observed Larry Tentarelli, the chief technical strategist at Blue Chip Daily Trend Report, in a note. The good thing is that it is still relatively inexpensive for a tech name, with a forward price/earnings ratio of 37.55.

Tentarelli pointed out that, of course, Nvidia “cannot continue to grow [so fast] year-over-year indefinitely,” but still has room to rise. His firm’s 12-month price target is $875, about a third more than the current price ($674 at Wednesday’s close).

The bet is that Nvidia will be the chief beneficiary of a burgeoning AI computing surge. Fellow members of the Magnificent Seven tech giants—Amazon, Meta, Facebook and Alphabet—account for around 40% of Nvidia’s revenue, as they move into AI.

Nvidia began posting record results three quarters ago as AI fever gripped Wall Street and the world. The company’s market cap blew past the $1 trillion mark in June, and now sits at $1.66 trillion.

Certainly, there are headwinds. The once-expanding China market is pulling back on chips from foreign producers, and rival Advanced Micro Devices Inc. is developing its own cutting-edge semiconductors.

Tags: Advanced Micro Devices, Artificial Intelligence, China, Larry Tentarelli, Nvidia, S&P 500, Stocks, Tech

Three of the city’s pension funds filed shareholder proposals seeking greater fossil-fuel transparency at six of the largest banks in North America.

New York City Comptroller Brad Lander and three of the city’s pension funds have filed shareholder proposals asking banks to fully report their ratios of clean energy to fossil fuel finance and “live up to their own rhetoric on achieving net zero implementation plans.”

The proposals were filed by Lander and trustees of the New York City Employees’ Retirement System, the Teachers’ Retirement System and the Board of Education Retirement System at JPMorgan Chase and Morgan Stanley, while NYCERS and TRS also filed proposals at Bank of America, Citigroup, Goldman Sachs, and Royal Bank of Canada.

The proposals are asking the banks to disclose energy-supply financing ratios and to report regularly and transparently on whether they are hitting their targets. Lander and the pension funds said energy-supply finance ratios are “an essential metric” to measure a bank’s equity and debt financing of companies and projects.

The resolutions also call for each bank to:

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Set timebound energy-supply financing ratio targets aligned with their net zero commitments.
Consult Bloomberg NEF reports when setting ratio targets and defining “low-carbon” and “fossil-fuel” financing.
Set standardized industrywide methodologies.
Include lending in its ratio – if it is “methodologically sound.”

“Despite all their talk, the big banks have made little progress in the energy finance transition over the past couple of years,” Lander said in a release. “As long-term investors exposed to climate risk, we can’t just take their word for it. Reporting transparently on their ratios of clean energy to fossil fuel finance is key to seeing whether or not they are living up to their net-zero commitments. Right now, they aren’t.”

As of December, the three New York City retirement systems owned 2.81 million shares combined in JPMorgan Chase worth $477.51 million; 7.17 million shares in Bank of America, $241.31 million; 2.32 million shares in Citigroup, $119.46 million; 385,630 shares in Goldman Sachs, $148.76 million; 1.36 million shares in Morgan Stanley, $126.81 million; and 216,120 shares in Royal Bank of Canada, $21.96 million.

“North American banks appear to believe that they can just scale up financing of clean energy, without phasing out fossil fuel finance,” Lander said. “But press releases about great new projects won’t protect our portfolios or our planet if overall emissions keep rising.”

RBC said in a statement to CIO that it is “committed to achieving net-zero in our lending portfolio by 2050,” and that it is working with its clients “to support their plans to bring their emissions down, not just to get them off our books.” The bank added that “we believe in open, transparent dialogue and appreciate the opportunity to engage with shareholders on a shared desire to help ensure a successful transition to net-zero.”

JPMorgan Chase declined to comment, while Morgan Stanley, Bank of America, Citigroup, Goldman Sachs and did not immediately respond to a request for comment.

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