Nvidia Faces Revenue Growth Slowdown Amid AI Supply Constraints
Nvidia (NASDAQ
) shares slipped in premarket trading Thursday following its forecast for the slowest revenue growth in seven quarters. The company’s fourth-quarter guidance predicts revenue growth slowing to 69.5%, compared to 94% in Q3, raising questions about the AI boom’s longevity.
Despite concerns, Nvidia emphasized robust demand for its AI chips, though supply chain constraints will likely persist well into fiscal 2026. The launch of its powerful Blackwell AI chip series is expected to pressure gross margins initially but improve over time.
- Bank of America Securities: “Expect near-term churn as investors digest the lack of ‘sizzle’ but we remain bullish on Nvidia’s ‘substance.'”
- Morgan Stanley: “Demand for Blackwell chips is staggering but supply constraints will remain a major factor for at least a year.”
Nvidia’s recent success in overtaking Apple (NASDAQ
) as the world’s most valuable company highlights the weight its performance carries for broader markets. However, disappointing guidance is likely to set a cautious tone for the rest of the week.
Adani Group Faces Fresh Allegations of Bribery Scheme
Shares in Indian conglomerate Adani Group plunged Thursday after its chairman, Gautam Adani, was indicted in a U.S. federal court for his suspected role in a $265 million bribery scheme. Adani and seven others allegedly paid bribes to Indian officials to secure solar energy contracts worth over $2 billion.
- Impact on Stocks: Shares in listed Adani Group companies fell between 10% and 20%, with flagship Adani Enterprises dropping 10%.
- Adani Group Response: The allegations are “baseless and denied,” according to a spokesperson.
These allegations echo those from a 2023 Hindenburg Research report that accused Adani of fraudulent practices, leading to over $100 billion in losses for the group at the time.
Starbucks Explores Options for China Business Amid Competitive Pressures
Starbucks (NASDAQ
) is reportedly considering a stake sale in its China business as it seeks to revitalize growth under CEO Brian Niccol. China, Starbucks’ second-largest market, has seen increased competition from both foreign and local players.
The company has been exploring partnerships with local firms to strengthen its position in the region. Domestically, Starbucks is also grappling with declining U.S. sales.
- Leadership Change: Brian Niccol, former Chipotle CEO, was appointed earlier this year to address these challenges.
Oil Prices Rise as Geopolitical Tensions Escalate
Crude oil prices edged higher Thursday amid fears of supply disruptions driven by Ukraine’s use of long-range U.S. and U.K. weapons against Russia, which Moscow has warned could be a significant escalation in the conflict.
- Crude Inventories: U.S. crude stocks rose by 545,000 barrels to 430.3 million barrels last week, exceeding expectations.
- Gasoline Stocks: A 2.1 million barrel build in gasoline inventories raised concerns about weakening U.S. fuel demand as winter approaches.
These developments balanced concerns over slowing demand with geopolitical risks, keeping prices volatile.
Market Snapshot: U.S. Stock Futures Edge Lower
Disappointing guidance from Nvidia weighed on U.S. stock futures Thursday:
- Dow Futures: Down 60 points (0.1%)
- S&P 500 Futures: Dropped 17 points (0.3%)
- Nasdaq 100 Futures: Fell 82 points (0.4%)
Investors are also eyeing upcoming jobless claims data and commentary from several Federal Reserve officials, which could influence the market’s direction.
Needham raised the firm’s price target on Snowflake to $200 from $160 and keeps a Buy rating on the shares. The company reported a solid quarter, where strong results and positive leading indicators are driving a higher price target with “increased conviction”, the analyst tells investors in a research note. Current Remaining Performance Obligation – cRPO – growth is also delivering the strongest sequential dollar addition for Snowflake in recent years as a result of execution against the renewal cycle, which included Snowflake closing three $50M+ total contract value deals
BofA says Nvidia’s “solid” Q3 results, but inline Q4 revenue outlook of $37.5B, is “perhaps disappointing some bulls” with consensus at $37B but investor hopes “closer” to $40B. Overall, the firm updated its estimates but keeps its above-consensus FY26 pro-forma EPS forecast steady at $4.47. The firm, which expects the stock to churn near-term as investors digest a lack of “sizzle,” but continue to like the stock on its “substance,” reiterates a Buy rating and $190 price target on Nvidia shares.
Roth MKM analyst Bill Kirk lowered the firm’s price target on Target (TGT) to $131 from $157 and keeps a Neutral rating on the shares after its Q3 earnings miss and guidance cut. The company is citing a shifting macro environment that caused its most profitable categories to fall out of favor, but results from Walmart (WMT) suggest Target is losing market share, the analyst tells investors in a research note. Given inventory levels and demand volatility, the firm is concerned regarding Target’s ability to properly prepare for potential tariffs, Roth MKM states, adding that Target has to lower relative prices and increase investment on a depressed earnings base.
Stifel lowered the firm’s price target on Target (TGT) to $137 from $165 and keeps a Hold rating on the shares. The firm lowered its FY24-FY26 estimates following the company’s “disappointing” Q3 results and below consensus Q4 outlook. While the company in part attributed decelerating comp trends to a cautious consumer spending environment, the firm believes the result indicates underperformance compared to large peers, particularly Costco (COST) and Walmart (WMT), the analyst tells investors.
Alibaba will merge its domestic and international ecommerce operations into a single ecommerce unit amid steep competition at home and abroad, Nikkei Asia’s Cizzy Zhou reports. According to an internal letter seen by the publication, Alibaba CEO Eddie Wu says the new business division will be led by Jiang Fan, who will report directly to Wu. The merged division will include Taobao and Tmall, Alibaba International Digital Commerce, Idle Fish, the 1688 Marketplace, and others.
Applied Materials, Inc. today introduced the MAX OLED solution, a patented OLED pixel architecture and display manufacturing technology designed to bring the superior OLED displays found in high-end smartphones to tablets, PCs and eventually TVs. The company said, “OLED is the display technology of choice for the world’s leading smartphone manufacturers because it offers superior display quality, light and flexible form factors, and durability. However, until today, it has proven challenging to scale OLED display manufacturing to the larger glass panels used to make displays for tablets, PCs and TVs. Applied’s MAX OLED solution makes it easier to scale OLED manufacturing from Gen 6 glass substrates to Gen 8 substrates, which are approximately two times larger, and beyond. In addition, the MAX OLED solution deposits OLED materials in a new way that increases pixel brightness and resolution, reduces display energy consumption, and lengthens display lifetime. The MAX OLED solution has strong customer interest, with repeat orders from multiple leading display manufacturers. Additionally, Applied will supply a MAX OLED solution to Samsung Display, a leading global manufacturer of OLED and QD-OLED panels. Samsung Display will be bringing in an alpha system to assess this new tech
BofA raised the firm’s price target on Netflix to $1,000 from $800 and keeps a Buy rating on the shares after 60M households, or 108M global live viewers from opening to closing bell, watched the Jake Paul versus Mike Tyson boxing match. The fight, the most-streamed sporting event of all time, was “an emphatic proof point of Netflix’s ability to aggregate global reach at scale for live events,” the analyst tells investors. The firm views the event as a positive for Netflix’s ambition in live/sports and also as it relates to the company’s ability to drive growth in advertising, despite the reported technical issues, the analyst added.
Nokia (NOK) has announced a five-year expansion of its multi-year agreement to supply Microsoft (MSFT) Azure with datacenter routers and switches. The partnership will grow Nokia’s global footprint to over 30 countries. The new agreement also builds upon the companies’ existing collaboration around open source SONiC. As part of the expansion, Nokia will supply its 7250 IXR-10e platform to deliver multi-terabit-scale interconnectivity within Microsoft’s datacenters. Nokia will also continue to deliver its custom developed management top of rack switch that is used extensively throughout the Azure network. The Nokia SONiC-based data center routers and switches will be deployed both in greenfield locations and used in support of Microsoft’s migration from 100GE to 400GE connectivity within existing facilities. This will enable Microsoft to meet increasing traffic demands for years to come with Nokia’s exceptional networking performance and reliability. Deployment of the Nokia 7250 IXR-10e will begin in February.
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