NVIDIA posts record quarter as AI demand drives 85% revenue growth despite China headwinds

Market Performance

South African Market Summary

South African equities advanced on Wednesday, with the JSE All Share index rising 0.86% to 114,634.05 points and the Top 40 gaining 0.99% to 106,948.72 points, despite firmer inflation data. Headline consumer inflation accelerated to 4.0% year-on-year in April from 3.1% in March, slightly above expectations of 3.9% and the highest level since August 2024. The increase places renewed focus on the South African Reserve Bank’s upcoming policy meeting, with markets likely to reassess the risk of tighter monetary policy. Separately, retail sales improved 2.6% year-on-year in March, signalling resilient consumer activity. Eskom also confirmed exploratory talks with the World Bank over funding for a potential nuclear programme of up to 5,200MW.

European Market Summary

European equities finished near two-week highs on Wednesday, supported by strength in defence and technology stocks as investors positioned ahead of Nvidia’s results and continued to monitor the US-Iran standoff. The pan-European STOXX 600 rose 1.5% to 620.29 points, while major regional indices, including Germany’s DAX and France’s CAC 40, gained more than 1.4% each. In the UK, inflation eased more than expected, with consumer prices rising 2.8% year-on-year in April, down from 3.3% in March, helped by softer regulated utility and household energy cost increases. However, the outlook for consumers remains challenging as higher global costs linked to the Iran war could filter through later this year. UK house price growth also stalled in March.

US Market Summary

Wall Street rebounded strongly on Wednesday, with the major indices gaining more than 1% as technology and semiconductor shares recovered ahead of Nvidia’s quarterly results. The update from the world’s most valuable company and leading AI chipmaker is viewed as a key test of whether artificial intelligence spending remains strong enough to justify elevated technology valuations. The gains followed a three-day selloff driven by concerns over the unresolved US-Israel war on Iran, with investors worried that higher oil prices could reignite inflationary pressure and force the Federal Reserve to raise interest rates. Sentiment improved after Iran confirmed continued message exchanges with Washington, while President Donald Trump said the US was prepared to wait for the “right answer” from Tehran.

Asian Market Summary

Asia-Pacific markets advanced on Thursday, tracking Wall Street’s rebound as hopes for a potential easing in the Middle East conflict helped cool oil prices and improve risk appetite. Technology shares led gains after Nvidia issued a stronger-than-expected revenue forecast, reinforcing confidence that demand for artificial intelligence chips remains robust. In South Korea, Samsung Electronics jumped 6% after its union suspended planned industrial action following a tentative pay agreement, easing concerns over potential disruption to global chip supply. Japanese exports rose 14.8% year-on-year in April, extending growth for an eighth consecutive month and challenging concerns over global stagflation. In Australia, weaker employment data and a higher jobless rate reduced expectations for a near-term interest rate hike.

 Currency Market Summary

The rand, South African equities and government bonds firmed on Wednesday after April inflation accelerated sharply, strengthening expectations that the South African Reserve Bank could raise interest rates at next week’s policy meeting. The US dollar eased below a six-week high on Thursday as hopes increased that Washington and Tehran may be nearing a deal to end the Middle East conflict, reducing safe-haven demand. The dollar slipped to 158.87 yen, moving further from the 160 level that markets view as a possible trigger for Japanese intervention, while hawkish comments from Bank of Japan board member Junko Koeda supported the yen. The euro held steady at US$1.1626 after recovering from its weakest level since 7 April, while the Australian dollar weakened on softer labour data.

Commodity Market Summary

Gold was little changed on Thursday as investors weighed rising hopes of a potential US-Iran peace deal against lingering concerns over inflation and higher-for-longer interest rates. The metal’s safe-haven appeal remained supported by geopolitical uncertainty, although improving risk sentiment limited further upside. Oil prices rebounded after two days of losses, with traders still cautious over the uncertain path to ending the Iran war and tighter US inventory data. The US Energy Information Administration reported a record weekly draw of nearly 10 million barrels from the Strategic Petroleum Reserve, while commercial crude inventories fell by 7.9 million barrels to 445 million barrels, far exceeding expectations for a 2.9 million-barrel decline. Gasoline stocks also fell, reinforcing supply concerns.

Domestic Company News

Sibanye-Stillwater Limited (SSW) +1.79%

Sibanye-Stillwater announced early tender results for its cash offer to repurchase up to US$75 million of its 4.500% senior notes due 2029, as the group continues to prioritise gross debt reduction and balance sheet flexibility. The offer, conducted through wholly owned subsidiary Stillwater Mining Company, follows the company’s 6 May announcement of separate tender offers for its 2026 and 2029 notes. The any-and-all tender offer for the US$675 million senior notes due 2026 was completed on 15 May 2026, while Sibanye-Stillwater UK Financing also closed a US$500 million 6.250% senior notes issue due 2031, satisfying the financing condition for the 2029 tender offer. The announcement relates only to the capped cash tender offer for the outstanding 2029 senior notes.

Southern Sun Limited (SSU) +1.18%

Southern Sun reported a strong set of reviewed results for the year ended 31 March 2026, supported by improved trading momentum, higher occupancies and stronger demand across its hotel portfolio. Income rose 9% to R7.2 billion, while Ebitdar increased 12% to R2.4 billion. Occupancy improved by 2.1 percentage points to 62.9%, helped by major international conferences and events, including the G20 in Gauteng, as well as firmer transient demand in South Africa. Adjusted headline earnings per share rose 19% to 90.1 cents, while attributable earnings increased 21% to R1.24 billion. The board declared a final dividend of 30.0 cents per share, up 20%, reflecting confidence in the group’s balance sheet and cash generation.

Balwin Properties Limited (BWN) +4.02%

Balwin Properties has received a firm intention offer from Bidco to acquire all eligible issued shares in the company by way of a scheme of arrangement at R4.35 per share in cash. Bidco is a newly incorporated vehicle controlled by Stephen Brookes, Balwin’s chief executive, and will ultimately be owned by a consortium including Volker, Rodna, GRE Africa and the PIC acting on behalf of the GEPF. The offer excludes treasury shares and shares held by reinvesting shareholders. If implemented, Balwin will become a wholly owned subsidiary of Bidco and its listings on the JSE and A2X will be terminated. The offer represents a 23.15% premium to the 30-day VWAP as at 19 May 2026.

Global Company News

Nvidia Corporation (NVDA) +1.30%

Nvidia reported record first-quarter fiscal 2027 revenue of US$81.6 billion, up 85% year-on-year and 20% quarter-on-quarter, as demand for artificial intelligence infrastructure continued to accelerate. Net profit surged to US$58.3 billion from US$18.8 billion a year earlier, driven by exceptional growth in the data centre division, where revenue rose 92% to a record US$75.2 billion. The company guided for current-quarter revenue of US$91 billion, signalling continued confidence in AI-related spending despite concerns over stretched technology valuations. Management said its outlook assumes no data centre revenue from China, where US export restrictions and domestic chip development remain key uncertainties. Shares slipped more than 1% in after-hours trade as investors digested the results.

Lowe’s Companies Inc. (LOW) +1.23%

Lowe’s reported first-quarter results ahead of expectations, supported by steady growth in professional customer categories, but management flagged continued pressure from a subdued US housing market and rising cost pressures. Quarterly sales reached US$23.08 billion, above LSEG estimates of US$22.97 billion, while adjusted earnings of US$3.03 per share also beat expectations of US$2.97. The company retained its fiscal 2026 guidance, expecting comparable sales to range from flat to 2% growth and adjusted EPS of US$12.25 to US$12.75. Lowe’s continues to invest in its Pro segment, including expanded product ranges and job-site delivery, to support contractor demand. However, elevated oil prices are increasing transportation and input costs, adding pressure to an already weak housing backdrop.

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