STOCK MARKET BLOG AUGUST 2024

by the CEO Silvano Grimaldi of the independent asset management company GRIMALDI & PARTNERS AG

MONTHLY REVIEW

International stock markets ended the month of AUGUST with slight gains.

DRIVING FACTORS

Signals from the US Federal Reserve for an interest rate turnaround in the world's largest economy now due in September.

STRESSFACTORS

Concern about a possible hard landing (recession) of the economy in the USA.
Rising tensions in the Middle East are adding to geopolitical concerns.

EQUITIES IN FOCUS

AI boom keeps NVIDIA on record course - Blackwell worries depress shares

The chip company Nvidia continues to profit enormously from the AI boom. In the last quarter, sales rose from 13.5 billion dollars in the previous year to 30 billion dollars - an increase of 122 percent. This means Nvidia is continuing the three months before, in which revenues jumped by 262 percent.

Nvidia technologies were originally developed for graphics cards. But then it turned out that they were also ideal for computing work when training applications with artificial intelligence. Nvidia's chips have thus become a key technology for the future of AI - and the company also benefits from the business with associated software and services. The business with technology for data centers grew particularly strongly in the last quarter. At 26.3 billion dollars, sales were 154 percent higher than a year ago, as Nvidia announced on Wednesday after the US stock market closed.

Nvidia's quarterly profit jumped year-on-year from just over $6.2 billion to just under $16.6 billion. For the current quarter, the company forecast a further increase in sales to $32.5 billion - while analysts on average had expected a forecast of just under $32 billion.

However, investors are concerned that the next Nvidia chip system, called Blackwell, will require further work.

MONTHLY OUTLOOK

Opportunities

The expected first interest rate cut in over four years by the US Fed in September is supporting prices.
The continued excellent profitability prospects of technology giant Nvidia.

Risks

Statistically, September is the weakest month of the year for the stock market.
Deterioration of the labor market situation in the USA which exceeds expectations.

We expect a sideways trend for the month of September.

STOCK RECOMMENDATION: NVIDIA