Nvidia beats all expectations again

Nvidia has once again played a leading role this week in the markets, after presenting first-quarter results that exceeded all expectations again: revenue surged by 262% compared to the same period last year to 26 billion dollars (around 24 billion euros) and earnings soared 628% to 14.9 billion dollars (13.7 billion euros).

Growth is also significant compared to Q4 of 2023, with revenue and profits up by 18% and 21% respectively in just three months, while margins improved by 2.4%. However, Javier de Berenguer, investment manager and fund selector at MAPFRE Gestión Patrimonial, points out that the quarterly growth isn’t as marked as in the previous quarters.

“We understand that the hyper growth phase is drawing to a close, but it’s still in an unbeatable position to continue capitalizing on the rise of this new technology,” he highlights, as the company's forecasts remain good for the time being.

The markets pounced on the results, driving Nvidia stock 7% higher in after-market trading. In addition, Nvidia’s figures are important for investor sentiment and also have an impact on the other AI-focused companies, a number of whom got a bounce on the back of the numbers.

In general, the markets appear to be running out of steam after the bull rally that began back in October. "This slowdown in increases shows that market complacency is no longer as high. This is a positive thing from an active management point of view and also combines less concentration in the revaluation of stocks and corporate earnings. In turn, this implies a greater dispersion between companies, even between those in the same sector or geographical area," says De Berenguer.

That’s why MAPFRE Gestión Patrimonial has a slightly positive position on the stock market, although it remains cautious. Opportunities are now to be found in those sectors that were left behind in recent months, which are trading at much more attractive multiples and are seeing an improvement in profits.

"We mustn’t forget about inflation, even if it’s no longer at such high rates, because there are medium- and long-term factors that can cause prices to exceed central bank targets, and that inflation wouldn’t be justified by the strength of the economy. That’s why we’re sticking with companies that have the capacity to transfer cost increases to the end customer in an environment marked by lower sales volumes," the fund manager and selector says.

Diversification is always important, but given the current moment of uncertainty, it assumes even more importance. “Now is not a time to make highly concentrated propositions,” concludes De Berenguer.

Fed meeting minutes

The U.S. Federal Reserve meeting minutes, also released this week, were another point of interest for investors, although this month, the messaging was already “pretty much factored in.” "The Fed emphasizes the employment market, which seems to be loosening, and an economy that’s slowing down. This falls within the soft landing scenario, where price pressure is lower and monetary policy is less restrictive," says De Berenguer.