Thanks to better-than-expected results and a bright outlook, the graphics card manufacturer ended yesterday's session up 16%. When you're already worth $1,650 billion before such an episode, you end up at $1,933 billion afterwards, which represents a capitalization increase of $277 billion in a single session. This is unprecedented for a single trading day, and it made Wall Street indices pop like champagne corks: +3% for the Nasdaq 100 at 18,005 points, a new record. +2.1% for the S&P500 at 5087 points, a new record, +1.2% for the Dow Jones at 39,069 points, a new record. The oldest index is now very close to the 40,000 mark.
Most sectors outperformed on Wall Street, except for boring ones like utilities and oil. In Europe, almost all markets rejoiced, except Switzerland, where Nestlé's 5% loss caused the SMI to drop by 0.3%, and the UK, which only scored a modest rise.
Nvidia is the stock with the biggest artificial intelligence label, so when it says that all is well and that AI is at a tipping point and represents a whole new industry, everyone jumps on the bandwagon. With all the financial opportunities that it represents, you can’t blame them.
Another big opportunity for investors might just have opened yesterday: the next lunar race. On Thursday, America returned to the Moon, 52 years after the Apollo 17 mission, although through an unmanned lander. The new-generation lunar race is now private, since the vehicle was designed by Intuitive Machines - a private company - and was launched from a SpaceX rocket, another private company. Intuitive Machines went public just a few months ago and investors love it already: the stock gained more than 220% since the start of the year.
According to venture capital firm Space Capital, there are at least 22 companies specifically focused on the Moon that have raised funds from private sources, and between 2012 and 2022, the lunar industry attracted $781 million in private investments.
The latest lunar mission, dubbed IM-1, is only the start. There will be many more NASA missions in the next two years to prepare for the return of manned missions to the satellite from 2026.
And of course, NASA will rely heavily on the private sector to achieve this goal. Among the names on its list of suppliers are SpaceX, Blue Origin, Deep Space Systems, Lockheed Martin Space, Moon Express or Orbit Beyond. None of this companies are listed yet, but it's good to keep them on your radar. To invest in listed companies linked to space exploration, you can check out MarketScreener's thematic list.
In other news, the market is discussing a comment from Goldman Sachs, which has shifted its forecast for the Fed's first rate hike from May to June.
The Japanese market is closed for a public holiday this Friday. Elsewhere in the region, China is hovering around equilibrium, while South Korea, India, Australia and Taiwan are up slightly, but far from the US euphoria. European leading indicators are still bullish, and so are futures on Wall Street.
Economic highlights of the day:
The dollar is slightly down to EUR 0.9231 and GBP 0.7882. The ounce of gold holds steady at USD 2,027. Oil is little changed, with North Sea Brent at USD 81.89 a barrel and US light crude WTI at USD 77.51. The yield on 10-year US debt has risen to 4.30%. Bitcoin trades at USD 50,900.
In corporate news:
- Semiconductor manufacturer Nvidia gained 16.4% in Thursday trading and its valuation jumped to $277 billion as investors' appetite for high-growth stocks and technologies took hold following its strong results and forecasts.
- Super Micro Computer fell 6.2% after pricing its convertible bonds.
- Discover Financial Services, Capital One will pay a $1.38 billion break-up fee if the planned merger of the two companies, announced on Monday, fails under any circumstances, a regulatory filing showed on Thursday.
- Booking’s fourth-quarter profit exceeded analysts' expectations on Thursday, thanks to a strong recovery in Asian markets, even as demand in the U.S. returns to normal levels after a post-pandemic peak.
- Live Nation, Ticketmaster's parent company, beat estimates for fourth-quarter sales on Thursday, helped by strong demand for concerts during the holiday season.
- Carvana - The used car retailer reported its first-ever annual profit on Thursday, helped by its pact with bondholders to reduce its debt by $1 billion. The group also forecast first-quarter adjusted core earnings "well in excess" of $100 million.
- MP Materials - The rare earths miner reported a smaller-than-expected fourth-quarter loss on Thursday, due to falling prices for strategic minerals and rising production costs.
- Meta Platforms - The group's supervisory board announced on Thursday that it would include Threads, its Instagram-linked micro-blogging platform, within its remit, allowing users to appeal the company's content moderation decisions.
- AT&T - The U.S. telecom operator said late Thursday that the outage that disrupted the mobile network of thousands of U.S. users and prompted federal investigations was not due to a cyberattack. The group has restored wireless service to all affected customers.
- General Motors - Cruise, the General Motors subsidiary specializing in autonomous driving, is preparing to resume testing its robotaxis on the road - and with a driver - in the coming weeks, Bloomberg reported on Thursday. Cruise suspended its US operations in October after an incident in San Francisco, where one of its robotaxis dragged a pedestrian hit by another car.
- UnitedHealth - Pharmacies in the U.S. are experiencing disruptions following a hack of Change Healthcare, UnitedHealth's technology division, several pharmacy chains said.
- Biogen - The European medicines regulator said on Friday it was recommending a marketing authorization for the group's Qalsody drug to treat amyotrophic lateral sclerosis.
- Intuitive Machines - The space exploration company is up 44% pre-market after a spacecraft built and piloted by the group landed near the Moon's South Pole.
Analyst recommendations:
- Block, Inc.: Seaport Global upgrades to buy from neutral with a target price of USD 95.
- Copart, Inc.: Morningstar downgrades to hold from sell with a price target raised from USD 45 to USD 47.
- Fox Corporation: Citi upgrades to buy from neutral with a price target raised from USD 34 to USD 35.
- Iqvia Holdings Inc.: Baptista Research downgrades to hold from buy with a price target raised from USD 258.90 to USD 259.30.
- Occidental Petroleum Corporation: Baptista Research downgrades to hold from outperform with a price target reduced from USD 67.30 to USD 63.90.
- Quanta Services, Inc.: William O'Neil & Co Incorporated upgrades to buy from dropped coverage.
- Booking Holdings Inc.: D.A. Davidson maintains its buy recommendation and raises the target price from USD 3400 to USD 4100. Morgan Stanley maintains its market weight recommendation and raises the target price from USD 3000 to USD 3700.
- Boston Scientific Corporation: Redburn Atlantic maintains its buy recommendation and raises the target price from USD 61 to USD 75.
- Builders Firstsource, Inc.: B Riley Securities Inc. maintains its buy recommendation and raises the target price from USD 177 to USD 216. D.A. Davidson maintains a neutral recommendation with a price target raised from USD 137 to USD 185.
- Nvidia Corporation: Phillip Securities maintains its buy recommendation and raises the target price from USD 645 to USD 970. DZ Bank AG Research maintains its buy recommendation and raises the target price from USD 640 to USD 870. Punto Research maintains its hold recommendation with a price target raised from 503 to USD 735.
- Rocket Companies, Inc.: Morgan Stanley maintains its market weight recommendation and raises the target price from USD 9 to USD 11.
- The Home Depot, Inc.: DZ Bank AG Research maintains its sell recommendation and raises the target price from USD 245 to USD 310.
- Unity Software Inc.: Stifel maintains its buy recommendation and raises the target price from USD 28 to USD 35.
- Breedon Group: Barclays upgrades to overweight from equalweight with a price target raised from GBP 3.80 to GBP 4.50.
- Compass Group: Goodbody downgrades to sell from hold with a price target reduced from GBP 21.50 to GBP 19.50.
- Domino's Pizza Group: Barclays downgrades to equalweight from overweight with a price target reduced from GBP 4.60 to GBP 4.
- Londonmetric Property: Kempen upgrades to buy from neutral with a price target raised from GBX 190 to GBX 215.
- Tritax Big Box Reit: Kempen downgrades to neutral from buy with a price target reduced from GBX 200 to GBX 165.
- Nutrien Ltd.: JP Morgan downgrades to underweight from neutral with a price target reduced from USD 58 to USD 48.