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Nvidia (US:NVDA) said it expects to generate $11bn (£8.9bn) of revenue in the next quarter – up 64 per cent year-on-year and 24 per cent ahead of analyst expectations. The company, which designs the graphics processing units (GPUs) essential for training AI large language models, saw its share price rocket 25 per cent in after-hours trading, taking Nvidia’s market cap $185bn higher to $940bn. That change alone is worth 1.5 times the market cap of rival chipmaker Intel (US:INTC).
Jefferies analyst Mark Lipacis said we were “witnessing the fourth tectonic shift in computing”. It’s not just revenue that is set to take off, with cloud computing companies scrambling over each other to get their hands on GPUs, Nvidia has been able to raise prices. It now expects the gross margin to rise four percentage points to 70 per cent.
Valuations are approaching ridiculous levels. Jefferies placed Nvidia trading on a forward price to sales ratio of 18 times, but it all depends on how much you buy into the AI story. AS
Read more: Chip wars: Which semiconductor stocks will come out on top?
Read more: Nvidia is now worth its high price
Dispute reignites at Royal Mail
A ballot of Royal Mail staff has been suspended by the Communication Workers Union (CWU), after complaints of a “toxic” work environment.
Posties have been voting on a pay and conditions deal that emerged after months of strike action, in a ballot that was due to close on 7 June. However, the CWU said it has “become clear [that] the environment we are attempting to deliver this agreement in remains toxic” and that management had “failed to take any responsibility whatsoever for the disastrous position the company finds itself in”.
It demanded immediate measures to restore the quality of service and a “mass Zoom meeting” for union representatives and managers.
Shares in Royal Mail’s parent company, International Distributions Services (IDS), have fallen by 6 per cent over the past five days. JS
Read more: Will Royal Mail ever make a profit?
Pets at Home keeps delivering
Pets at Home (PETS) is celebrating a “record” 12 months of trading, and momentum has continued into the new year. The pet care company increased underlying profit before tax by 4.8 per cent to £136.4mn in the year ended 30 March, just ahead of consensus guidance. Growth was fuelled by the group’s veterinary division, as opposed to its retail offer. JS
Read the full story: Pets at Home defies the retail gloom
Leaner year for Johnson Matthey
Johnson Matthey (JMAT) beat expectations for its full year numbers but saw a slide in adjusted sales and profits, as lower platinum group metal (PGM) prices and higher costs took their toll in the 12 months to 31 March. The company makes car exhaust systems, and is a specialist at PGM recycling and refining, and also has a growing hydrogen division. It will pay a final dividend of 55p a share, meaning the total payout of 77p is the same as last year.
The clean air division, which sells catalytic converters, reported a 28 per cent dip in operating profit, to £230mn, in the year. This came from “cost inflation, product mix, lower volumes”, Johnson Matthey said, adding that the second half of the financial year was in line with 2022 as the car industry boosted volumes and it was able to pass on costs. AH
Cohort gains from global upheaval
Defence company Cohort (CHRT) said full-year earnings would be “slightly ahead” of expectations on the back of more robust demand.
Cohort finished the year to 30 April with an order book of £325mn, which is £34mn higher than at the start of the year and covers around 84 per cent of forecast revenue for its current financial year. It has also won £26mn of orders since its year end.
The company said the ongoing conflict in Ukraine and tensions in the South China Sea had “provided drivers for increased investment in defence, both in NATO and further afield”. Cohort’s shares were up 3 per cent in early trading. MF
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