Nvidea stand out quarter
Daniela Hathorn, senior market analyst at Capital.com said:
“Nvidia delivered another standout quarter, reinforcing its reputation as one of the market’s most consistent outperformers. Revenue and earnings comfortably beat expectations, driven once again by stronger-than-forecast data centre sales. Margins also came in firmer than feared, easing concerns that aggressive scaling and rising input costs would begin to erode profitability. Perhaps most importantly, forward guidance surprised to the upside. Revenue projections for the next quarter exceeded already elevated expectations. The reaction saw NVIDIA’s stock move higher, however it missed the $200 mark, which had been highlighted as a key level to test bullish appetite. It stands to be seen whether the rally can be sustained over the next few days.
Meanwhile, the strength of Nvidia’s results added fuel to what was already a constructive session for technology stocks. The Nasdaq broke higher, while the S&P 500 pushed back towards its own record territory. After a period where the narrative around AI spending had turned increasingly pessimistic the earnings release seems to have provided a reset. In the short term, it appears that bearish positioning had become stretched, and the scale of Nvidia’s beat forced a recalibration.
That said, structural questions remain. The longer-term issue of hyperscalers aggressively re-leveraging and racing to outspend each other on AI infrastructure has not disappeared. Concerns about margin compression and capital discipline are likely to resurface at some point. However, from a sentiment perspective, the results have restored confidence that demand for high-performance chips remains robust and that the AI buildout is still in its early stages.
Encouragingly for broader risk appetite, positive spillovers were visible beyond equities. The crypto complex also showed signs of life, with Bitcoin rallying sharply and price action suggesting a potential bottoming process. Taken together, Nvidia’s earnings appear to have acted as a catalyst, shifting market mood from caution to renewed optimism — at least for now.”
Charlotte Wilson, head of Enterprise business UKI Check Point Software, said:
“The naysayers will have to reconsider their position, as AI demand continues to surge at a rapid rate. One of the main reasons AI will continue to dominate the agenda is its clear use case to turbocharge business productivity, something anyone running a P&L will want to embrace. The only barrier to continued mass adoption will be associated security risks, that’s why it’s vital that cyber protection and resilience must be built into these investments from the very beginning.”
Kenny MacAulay, CEO of Acting Office, a software platform for accounting practices said:
“Nvidia’s bullish performance underlines the reality that the demand for AI remains insatiable and will do so for the foreseeable future. However, AI is only as good as the data it has access to, and far too many firms are working with fragmented, outdated and poorly governed data which needs fixing first. The technology is indeed disruptive to traditional working patterns, but also essential for upgrading and rebooting poorly performing business infrastructure that is no longer fit for purpose.
“Many organisations are saddled with unused applications and software packages which can be swept away under AI-powered working models. Fighting against this trend is not a viable option.”
“Comment: IGV rebound highlights AI-driven volatility in software”>IGV rebound highlights AI-driven volatility in software
Russell Shor, Senior Market Analyst at Jefferies-owned Tradu.com, on what the latest move in the iShares Expanded Tech-Software Sector ETF (IGV) signals about AI sentiment in the software space.
The IGV rose around 2.4% yesterday, with stocks including Samsara, Twilio, Box, HubSpot and Asana bouncing as sentiment improved after recent heavy selling.
Russell says the ETF is a key gauge of AI sentiment, with recent weakness reflecting investor anxiety that AI could disrupt traditional software revenue models and compress valuations. He adds that although there are tentative signs of dip-buying, volatility remains high, and the next move in IGV will be crucial in determining whether confidence is returning or concerns are becoming more entrenched.
Russell Shor, Senior Market Analyst at Tradu.com commented:
“The iShares Expanded Tech-Software Sector ETF (IGV) remains a key barometer of AI sentiment, highlighting pressure on software stocks as investors reassess growth expectations. Concerns that AI could automate core functions and erode pricing power have weighed on valuations, driving the ETF sharply lower.
“There are tentative signs of dip-buying, with net flows turning slightly positive after Monday’s outflows. However, volatility remains elevated and concerns about AI cannibalisation persist. Workday, in its latest earnings, emphasised increased investment in its ‘agentic AI’ strategy and pushed back against the idea that AI will displace core enterprise software. Salesforce’s report will also be of interest after the close today.
“This remains a critical area to monitor. Further declines in IGV would suggest fears are becoming more entrenched, while a sustained rebound would indicate confidence that the software segment is stabilising.”
Ocado shares plummet despite path to profit
Adam Vettese, market analyst for eToro, says:“ results offered some operational wins showing 12% revenue growth, EBITDA up to £178m with Technology Solutions margins at 25%. However, the 5.5% share price plunge this morning reveals deep scepticism.
“The Ocado Retail joint venture grew sales 15% with EBITDA doubling, yet persistent £213m cash burn, £250m capex for 2026, and partner exits like Kroger have overshadowed statutory profit of £395m, which reeks of one-off adjustments.
“Guidance for H2 2026 cash flow positivity and £150m cost cuts sounds promising, but investors are clearly unconvinced, prioritising execution risks over promises. This is a high beta cautionary tale where contract fragility and capital intensity remain unaddressed.
“Bulls cling to tech scalability but today’s sell off highlights Ocado as a speculative trap for all but the most patient, near term volatility likely persists.”
Rolls Royce ignites afterburners announcing massive buyback as profits soar
Mark Crouch, market analyst for eToro, says: “This is Rolls Royce in full afterburner mode. A £3.5bn underlying operating profit and 17.3% margin would have seemed fanciful just a few years ago, yet the transformation programme is now delivering in spades. Free cash flow of £3.3bn and a £1.9bn net cash position mark a remarkable balance sheet reversal.
“What’s most striking is not just the beat, but the confidence. Management has upgraded mid-term targets again and is guiding to as much as £4.2bn of operating profit in 2026. That’s a far cry from the restructuring story investors once bought into.
“The massive buyback plan across 2026–2028, on top of dividends, signals a company that believes its earnings quality is durable. With the engines of growth firing on all cylinders, civil aerospace flying hours have roared back beyond pre-pandemic levels, while defense spending soars around the globe.
“The shares spluttered a couple of times last year as sceptics warned of peak-cycle profits. Each wobble was met with more thrust. For years, Rolls-Royce was a recovery trade. Now it’s a cash machine, and the market is starting to price it like one.”
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