NVIDIA AI & Market Rebound
The undisputed star of the day was NVIDIA, whose adjusted earnings per share of $1.30 on $57.01 billion in revenue absolutely crushed expectations. This represents a staggering 62% and 67% year-over-year growth, respectively, far exceeding the Bloomberg analysts' forecast of $1.26 EPS on $55.2 billion.
What fueled this growth?
As anticipated, NVIDIA's data center revenue was the powerhouse, soaring by 66% year-over-year to a record $51.2 billion. CEO Jensen Huang highlighted this, stating, "Compute demand keeps accelerating and compounding across training and inference, each growing exponentially." This clearly signals the sustained, explosive growth in AI infrastructure.
Looking ahead, NVIDIA's guidance for the fourth quarter is equally optimistic, projecting $65 billion in revenue (plus or minus 2%), which is significantly higher than analyst estimates. The company also boasts over $62.2 billion in remaining share buybacks and an adjusted gross margin ball-parking 75%. CFO Colette Kress even hinted at half-a-trillion in chip revenue through 2026, silencing many skeptics of the AI boom.
Market Impact:
The news sent NVIDIA shares jumping over 3% after hours, adding to its 2.85% gain during regular trading. This positive momentum also rippled through related sectors, bolstering hyperscalers like Nebius (+5.4%) and CoreWeave (+5.3%), and fellow chipmakers such as TSMC (+2.6%) and AMD (+2.2%) in extended trade.
After four consecutive days of declines, the major U.S. stock benchmarks managed to turn around intraday losses and close in the green. It was a much-needed breath of fresh air for investors!
- Nasdaq Composite: +0.59%
- S&P 500: +0.38%
- Dow: +0.10%
Both the S&P 500 and Dow successfully snapped their four-day losing streaks, a welcome sign of resilience. However, it wasn't a universal rally, as the small-cap focused Russell 2000 (-0.04%) ended the day slightly down.
Top Performers & Key Movers in the S&P 500:
Despite 305 constituents falling, some names shone brightly. Leading the charge were:
- GE Vernona (+7%)
- Block (+7.5%)
- Constellation Energy (+5.8%)
Among the Magnificent Seven, Alphabet (+3.4%) continued its strong performance, proving to be the best-performing of the group this year.
While NVIDIA dominated the headlines, other companies also released earnings and made significant corporate announcements.
Earnings Highlights:
- Palo Alto Networks (-2.6%): Beat adjusted EPS expectations ($0.93 vs. $0.89) and revenue ($2.474 billion vs. $2.461 billion). The company also announced plans to acquire Chronosphere for $3.35 billion, projecting 14-15% revenue growth for the coming quarter.
- Brightview (-12%): Missed on both adjusted EPS ($0.27 vs. $0.32) and revenue ($702.8 million vs. $718.6 million), leading to a significant dip in its stock.
Major Corporate Moves:
- Abbott Laboratories & Exact Sciences: Bloomberg News reported that medical device giant Abbott Laboratories is in talks to acquire Exact Sciences, a diagnostics company known for cancer tests like Cologuard. This potential deal, valued at over $15 billion, would be Abbott's largest in a decade and the biggest healthcare firm takeout this year. Exact Sciences' stock surged 20% on the news!
- Adobe to Acquire Semrush: Creative software leader Adobe announced its intention to buy Semrush for $1.9 billion. This strategic move aims to bolster Adobe's marketing and generative AI tools, promising a comprehensive solution for marketers to understand their brand presence across various digital channels, including large language models. Adobe stock, however, saw a nearly 2% decline on this news.
The Federal Reserve's Federal Open Market Committee (FOMC) meeting minutes from October 29th offered a fascinating glimpse into the internal debate over interest rate cuts. While the central bank did cut rates in October, the minutes revealed a "greater bifurcation" on the issue, with "many" members believing a December cut might not be necessary.
The Data Desert:
Adding to the Fed's challenge is a current lack of crucial economic data. The Bureau of Labor Statistics (BLS) cancelled the October jobs report, and the November report won't be out until December 16th. Similarly, September JOLTS data was cancelled, with October's not available until December 9th. This data vacuum makes the decision for the upcoming December meeting even more complex.
Market Reaction:
Following these insights, the probability of a rate cut at the December 10th meeting plummeted to 31.6% on CME Group's FedWatch. This news also caused stocks to sag from their intraday highs, with the S&P 500 and Dow briefly trending towards a fifth consecutive day of losses before their late-day rebound.
Beyond the major headlines, the market saw some notable individual stock movements, and the crypto space continued its downward trend.
Top Midday Gainers:
- WeShop Holdings (+436%): This UK-based e-commerce platform, which offers shoppers company shares, had an explosive debut on Nasdaq.
- Nuvation Bio (+44%): Soared on positive phase 2 clinical trial results.
- Transmedics (+10.1%): Experienced a solid gain without immediate major news.
Notable Midday Losers:
- Wix.com (-17.2%): Despite beating earnings and raising its outlook, the website builder was hammered due to the increased costs associated with implementing AI, pushing shares down from recent lows.
- Plug Power (-15.9%) & Opendoor (-12%): These popular retail trades also saw significant declines.
- Crypto Companies: Circle (-10.2%), Strategy (-9.6%), and American Bitcoin Corp (-9%) were hit hard as Bitcoin and Ethereum fell through key psychological levels of $90K and $3K respectively, bringing the total crypto market capitalization close to falling out of its historic $3 trillion mark.
Q2. How did the S&P 500 and Dow perform today, and what streak did they snap?
A. The S&P 500 gained +0.38% and the Dow gained +0.10%, both snapping a four-day losing streak.
Q3. Which major corporate acquisition was reported to be in talks today, and for what valuation?
A. Abbott Laboratories was reportedly in talks to acquire Exact Sciences, a diagnostics company, for over $15 billion.
Q4. What did the FOMC minutes indicate about the Federal Reserve's stance on rate cuts for December?
A. The FOMC minutes showed "greater bifurcation" on the rate cut question, with "many" members believing a December cut might not be necessary, causing the probability of a cut to fall on CME Group's FedWatch.
Q5. Which stock saw an extraordinary gain of over 400% on its Nasdaq debut today?
A. UK's WeShop Holdings surged +436% on its Nasdaq debut.