Nvidia Corp., one of the dominant players in the semiconductor industry, is expected to deliver substantial revenue growth moving into the first quarter of 2024, driven primarily by soaring demand for its new Blackwell chip.

Wall Street analysts, including C.J. Muse from Cantor Fitzgerald, believe Nvidia is primed to exceed consensus revenue expectations as it begins to capitalize on this demand.

In its recent earnings report, Nvidia noted the increasing demand for the Blackwell chip, which the company expects will generate several billion dollars in revenue by the January quarter.

Early estimates from Wall Street suggest about $4 billion in revenue from Blackwell in Q1 2024, but some analysts believe that the actual number could be even higher.

C.J. Muse and his team at Cantor Fitzgerald have identified Nvidia as having the “best upside to consensus” among the semiconductor companies they track, suggesting that the tech giant has the potential to beat Wall Street’s projections by a significant margin in the coming quarters.

Strong demand for Blackwell sets high expectations

One of the critical factors fueling this optimism is the unprecedented demand for Nvidia’s Blackwell chip. Nvidia’s CEO, Jensen Huang, described this demand as “insane,” underscoring the enthusiasm for the product.

The Blackwell chip, which is designed to meet the needs of artificial intelligence (AI) servers, has seen strong interest from industries investing in AI infrastructure, pushing Nvidia’s expected revenue figures higher.

According to Muse, Nvidia is well-positioned to take advantage of this demand and exceed expectations.

He predicts Nvidia’s January-quarter revenue will reach approximately $37 billion, about $1 billion higher than Wall Street’s consensus estimate.

Furthermore, Muse projects that Nvidia’s revenue for the April quarter will rise to $41 billion, which is also roughly $1 billion above market expectations.

Muse emphasized that Blackwell “should drive upside to numbers and quell fears around any air pocket ahead of what we believe to be the company’s biggest and baddest product cycle we’ve seen.”

Market response and stock performance

Nvidia’s stock has responded positively to the strong demand projections for the Blackwell chip.

On Tuesday, the company’s stock price rose 4%, marking its fifth consecutive day of gains.

Nvidia shares are now just 2% below their all-time high of $135.58, which was reached on June 18.

Jordan Klein, an analyst at Mizuho, echoed the positive sentiment surrounding Nvidia’s stock.

He noted that both long-only and hedge-fund investors are becoming more bullish on Nvidia as the company approaches the start of 2025, particularly given the increasing demand for Blackwell chips.

Klein suggests that this demand may lead to significantly larger revenue beats and stronger outlooks for Nvidia moving into next year.

The optimism surrounding Nvidia is not without precedent. The company has a track record of delivering on ambitious goals and outperforming analyst expectations.

The Blackwell chip, with its ability to handle the demands of AI servers, is seen as a key factor in the company’s growth strategy for 2024.

Nvidia’s future potential

As Nvidia prepares for what analysts believe will be a record-breaking product cycle, industry observers are closely watching how the company handles the high demand for its chips, especially as competition in the semiconductor sector heats up.

Despite some concerns about potential supply constraints, Nvidia’s robust execution and ability to scale its operations have kept investors optimistic.

Cantor Fitzgerald’s C.J. Muse has made it clear that Nvidia is currently his firm’s top pick in the semiconductor space.

With the launch of the Blackwell chip and the broader adoption of AI technologies, Nvidia is well-positioned to capture a significant share of the growing AI infrastructure market.

Looking ahead, analysts are confident that Nvidia’s continued focus on innovation and execution will enable the company to not only meet but surpass its revenue targets, particularly as the Blackwell chip becomes a central driver of its business.

Investors will be keeping a close eye on Nvidia’s performance in the coming quarters as the company navigates a rapidly evolving industry and growing demand for AI-related technologies.

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Tradeweb (TW) and MarketAxess (MKTX) stocks have done well in the past few months, helped by the rising demand for fixed income solutions. MKTX has soared to $280, up by over 45% from its lowest point this year, bringing its market cap to over $10 billion.

Tradeweb has done much better, with its stock soaring by over 46% this year and 60% in the last 12 months. Its performance has pushed its valuation to over $31 billion, making it one of the biggest companies in the industry.

Giant players in fixed income

Stock brokerage companies like Robinhood and Schwab are well-known brands in the United States. That is because most people interact with stocks all the time.

While the equity market is big, the debt market is much bigger. Data by the International Monetary Fund (IMF) shows that the global debt market is worth over $315 trillion while the equity market is valued at over $111 trillion. The main issue is that debt is not seen as sexy as equities. 

Tradeweb and MarketAxess are some mostly unknown companies among most Americans because of their role in the fixed income industry. They are, nonetheless, well-known brands among institutional investors.

Established in 2000, MarketAxess has grown to become one of the top players in the debt market, handling trades worth over $3.1 trillion in 2023. It has also grown itss market share in the high-grade and high-yield bond market to 20%.

Tradeweb is the biggest player in the debt market with clients from over 70 countries. Its platform that lets investors buy and sell fixed income. Its main difference with MarketAxess is that it relies on request-forquote (RFQ) and order book trading. In this, when a customer places an order, the company’s technology les them seek competitive pricing. 

MarketAxess, on the other hand, focuses on open trading, which enables anonymous all-to-all trading.

The other difference between the two is that Tradeweb provides more solutions like government bonds, mortgage-backed securities (MBS), interest rate swaps, and corporate bonds. As a result, the company handled deals worth over $8.8 trillion in 2023.

Tradeweb and MarketAxess make money by taking a small cut of all orders that pass in their platform. 

Growth is accelerating

Tradeweb and MarketAxess have done well in the past few months because of the anticipated demand for credit in the US and other countries. 

This demand has led to a substantial increase in trading volumes. The most recent financial results shows that Tradeweb had an average daily volume (ADV) of $1.9 trillion, a 48% increase from the same period in 2023. This growth happened mostly because of the surge in US government bonds. 

Its revenue rose by 30% to $404 million, with rates, credit, and market data being the best performers with annual changes of over 30%. Its net income jumped by 33.8% to over $136 million. 

Analysts are optimistic that Tradeweb’s business will continue doing well as interest rates start moving downwards. Tradeweb is a highly profitable company with a gross profit margin of 94% and a net margin of 28%. 

MarketAxess has also continued doing well. In a recent statement, the company said that its daily trading volume averaged $45.2 billion in September, a 52.5% increase from the same period in 2023. 

Its earnings report showed that total revenue rose by 10% in the second quarter to over $197.7 million. Its operating income rose by 7% to $81 million while its net income spiked by 8% to $65 million.

Like Tradeweb, MarketAxess is a bigh-margin company. It makes gross margins of 65% and net income margin of over 33%.

Marketaxess stock analysis

MKTX chart by TradingView

The daily chart shows that the MarketAxess share price bottomed at $197.72, its lowest point in October and July. It has recently formed a golden cross pattern as the 200-day and 50-day Exponential Moving Averages (EMA). 

The stock is nearing the important resistance point at $294.75, its highest swing in December last year. Also, the Relative Strength Index (RSI) and the MACD have continued rising. Therefore, the path of the least resistance is bullish, with the next point to watch being at $294, which is about 7% from the current level.

Tradeweb stock forecast

TW chart by TradingView

On the daily chart, we see that the TW share price has done well in the past few months. It has remained about 12% above the 50-day moving average and 25% higher than the 200 MA. 

The Relative Strength Index (RSI) and other indicators have continued rising, with the RSI moving to the extremely overbought point at 80. Therefore, while Tradeweb is seeing more growth, there is a risk of a pullback now that it has soared sharply recently. 

Therefore, in this case, some analysts believe that the stock may see a pullback in the near term as some traders start taking profits.

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Broadcom (AVGO) stock price is firing on all cylinders as the company matches towards a $1 trillion market cap. It has risen by over 61% this year, pushing its market cap to over $817 billion. 

As such, it needs to rise by 22.38% to $220 to get to a trillion-dollar valuation, which is possible if the current momentum continues. 

Broadcom and the AI opportunity

Broadcom is a large technology company with a presence across various sub-sectors. It is a leading player in the semiconductor industry, where it offers broadband, networking, wireless, storage, and industrial solutions. 

Broadcom is not as popular as other chip companies like Intel, AMD, and Nvidia, because people rarely interact with its semiconductor products. However, most people use its solutions through its clients like Apple, Samsung, Google, and Amazon.

A key solution that Broadcom makes in this segment is its Tomahawk chip, which is set to increase broadband to 102.4 Tbps, double that of the last generation. These chips are also significantly faster than those made by companies like Cisco and Marvell.

It is also a big player in the software industry through its Brocade, CA Technologies, an Symantec. 

All these businesses, and its substantial market share, have made Broadcom to be one of the biggest companies globally. Its business is also growing substantially in the past few years, with the total revenue rising from $22.6 billion in 2019 to $46 billion in the trailing twelve months.

Some of this growth was organic while most of it was through acquisitions. The most recent mega buyout was VMware, a top company in the virtualization industry, in a $30.8 billion deal.

Before that, it bought Symantec in a $10 billion deal, CA Technologies for $18.9 billion and Brocade for $5.5 billion. These buyouts have helped it become one of the biggest players in the software industry. 

Read more: Broadcom stock has turned $1,000 into $9,000 in 4 years: what’s next?

Broadcom’s growth has continued

The most recent financial results showed that Brodcom’s revenue soared to $13 billion, a 47% annual increase. While the company had organic growth, most of this performance was because of its VMware business. 

Most of this revenue, or $7.2 billion, came from its semiconductor segment, which made $7.27 billion. Infrastructure software made over $5.7 billion. Also, its free cash flow rose to over $4.79 billion.

Broadcom estimated that its fourth-quarter revenue would rise by $1 billion to over $14 billion.

Analysts believe that Broadcom has room to grow its business, especially in this era of artificial intelligence. The average estimate is that its revenue will be $14.04 billion, slightly higher than the company’s forecast. 

Broadcom has a good record of doing better than estimates. Most recently, its earnings were better than estimates in the last three consecutive quarters.

Read more: Broadcom stock analysis: AVGO could hit a $1 trillion valuation

AVGO valuation concerns

Analysts expect that Broadcom’s annual revenue will grow by 44% to $51.6 billion followed by $64 billion in the next financial year. 

Some analysts, including this, expect that Broadcom’s annual revenue will remain in the double digits in the next few years. He expects that its annual revenue will be over $145 billion by 2030 and $184 billion by 2033. 

If these numbers are accurate, and if Broadcom’s net income margin grows from the current 10.8% to 15% by then, it means that its annual profit will be over $27.6 billion, a big increase from the $14 billion it made in the last financial year. 

Broadcom trades at a non-GAAP price-to-earnings (P/E) ratio of 38.56, which is substantially higher than the industry median of 23. Its forward P/E multiple of 36 is also higher than the industry median of 23. 

Also, these metrics are significantly higher than the five-year average of 20.3 and 18.7, respectively. These numbers mean that the company will need to continue executing well in the coming years. 

Broadcom is also popular because of its dividends, which it has boosted by over 14% in the last five years. It has a dividend yield of 1.2% and a payout multiple of 46%. Also, the company has grown its payouts in the last 13 years, making it a potential future dividend aristocrat.

Broadcom stock price analysis

AVGO chart by TradingView

The daily chart shows that the AVGO stock price has been in a strong bull run in the past few months. It has risen above the key resistance point at $170.9, its highest point on August 22. 

The stock has moved above the 50-day and 100-day Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI), Stochastic Oscillator, and the MACD indicators have moved upwards. 

Therefore, a move above the key resistance point at $184.20, its highest point in June this year. A move above that level will invalidate the double-top pattern, and point to more gains. If this happens, the Broadcom share price will likely continue rising as bulls target the key resistance at $220, pushing its market cap to over $1 trillion.

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Indian equity benchmarks surged on Wednesday after the Reserve Bank of India changed its monetary policy stance to “neutral”. 

At the time of writing, the BSE Sensex was up 555.59 points at 82,190.40, while the Nifty50 index rose 185 points to 25,198.15.

Overnight, US equity stocks rose as oil prices slipped more than 4%. Most Asian stocks opened higher on Wednesday, tracking overnight gains in Wall Street. 

However, Chinese stocks were by far the worst performers, as  Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell more than 4% each from Tuesday’s highs. 

RBI keeps repo rate unchanged

The Reserve Bank of India has kept the key lending rate (repo rate) unchanged at 6.5%.

This is the tenth consecutive time the central bank has left the repo rate unchanged. 

However, the central bank has changed its stance to “neutral” from “withdrawal of accommodation” earlier. 

RBI Governor Shaktikanta Das said the monetary policy committee considered changing the stance and remained focused on bringing the inflation rate within the central bank’s preferred range. 

Also, India’s GDP forecast for 2024-25 (April-March) was left unchanged at 7.2% by the RBI. Das further said that India’s financial sector was healthy, resilient and stable. 

Bank stocks, NBFCs rally after RBI changes policy stance

Shares of interest rate-sensitive stocks climbed after the policy meeting of the RBI. 

Shares of banks and non-banking finance companies (NBFCs) surged by up to 4% on Wednesday after the RBI changed its policy stance to “neutral”.

Shares of SBI rose 2.6% on Wednesday, while those of ICICI Bank also gained 1.7%. Axis Bank’s stock rose 2.5%, while Punjab National Bank’s shares surged 1.5%. 

Shares of Shriram Finance were among the top gainers on Wednesday.

The stock surged by more than 4%, boosted by positive sentiments after the RBI’s meeting outcome. 

Shares of other NBFCs, including HDFC Asset Management Company, Cholamandalam Investment and Fin Co and Muthoot Finance surged by 3% on Wednesday morning. 

OMC stocks rise as oil prices ease

Shares of oil marketing companies surged on Wednesday as global prices declined sharply since Tuesday. 

Shares of Indian Oil Corporation rose 1.6%, while those of Bharat Petroleum Corporation gained 1.9%.

Among these, Hindustan Petroleum Corporation was the top gainer as its shares surged nearly 5%. 

Oil prices had slipped more than 4% on Tuesday as traders waited for an Israeli response to Iran’s attack last week.

Prices had declined as there had not been any response so far from Israel, which eased some of the tensions in the oil market. 

Downstream oil marketing companies tend to perform better when oil prices fall as they import crude from outside to refine into petroleum products. 

Torrent Power’s stock jumps 9%

Shares of leading power company, Torrent Power, jumped 9% on Wednesday, and touched a new record high. 

The stock advanced after Torrent Power secured a letter of award from Maharashtra State Electricity Distribution, according to a report by The Economic Times. 

The letter of award was for long-term supply of 2,000 Megawatt (MW) Energy Storage Capacity from InSTS Connected Pumped Hydro Storage Plant, according to the report. 

Meanwhile, shares of SpiceJet surged 7% on Wednesday on settlement of a dispute. SpiceJet and Babcock & Brown Aircraft Management settled a $131.85 million dispute. 

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Rio Tinto, the world’s second-largest miner, has announced its acquisition of US-based Arcadium Lithium for $6.7 billion.

The all-cash transaction values Arcadium at $5.85 per share, reflecting a 90% premium on its closing price of $3.08 on Oct. 4.

This purchase represents a major strategic move for Rio Tinto as it looks to bolster its position in the energy transition materials sector, particularly lithium, which is critical for electric vehicle (EV) batteries and renewable energy storage systems.

Rio Tinto’s Arcadium buyout marks significant step in securing lithium supply

This acquisition comes at a time when global mining companies are racing to secure essential minerals necessary for the ongoing energy transition.

Arcadium Lithium, which has a market value of $4.56 billion according to LSEG data, has seen a 37% surge in its stock this week alone.

The deal positions Rio Tinto as a dominant player in the lithium space, second only to Albemarle and SQM, the global leaders in lithium production.

With Rio Tinto’s London-listed shares down 4.7% this week, the announcement of this deal is seen as a significant step forward in the company’s long-term strategy to create a world-class lithium operation.

This will complement its existing operations in aluminium and copper, strengthening its overall portfolio and ability to meet the growing demand for materials essential to clean energy solutions.

How Rio Tinto’s acquisition impacts the market amid Chinese oversupply

The move comes as lithium prices face downward pressure due to oversupply from China.

According to FactSet data, benchmark 99.2% lithium carbonate prices have fallen over 20% year-to-date, currently standing at $10,800 per metric ton.

By acquiring Arcadium, Rio Tinto aims to mitigate this volatility, ensuring a steady supply of lithium despite the current market fluctuations.

This acquisition is part of a larger trend among mining giants to secure their supply chains for critical minerals.

The demand for lithium is expected to rise dramatically in the coming years as the world transitions to electric vehicles and renewable energy, making lithium one of the most sought-after commodities globally.

Rio Tinto’s move to solidify leadership in green energy materials

Arcadium Lithium CEO Paul Graves expressed confidence in the deal, stating that the transaction provides a compelling offer for shareholders and de-risks their exposure to market volatility.

Graves added that the deal would accelerate and expand Arcadium’s strategy, benefiting customers, employees, and the communities where the company operates.

Rio Tinto CEO Jakob Stausholm echoed this sentiment, highlighting the acquisition as a strategic milestone in Rio Tinto’s broader effort to lead the transition to green energy materials.

By adding Arcadium’s assets to its portfolio, Rio Tinto strengthens its position in a rapidly evolving market, where lithium and other essential materials are becoming increasingly important.

Previous failed merger signals challenges in the mining sector

This deal also comes on the heels of a failed mega-merger earlier this year in the same sector.

In May, BHP Group withdrew from a potential acquisition of Anglo American after the latter rejected a request to extend takeover discussions.

The breakdown of that deal was a reminder of the challenges that come with securing major mergers in a sector under increasing pressure to deliver essential materials for the green energy transition.

Key takeaways from Rio Tinto’s Arcadium Lithium acquisition

As the demand for critical minerals such as lithium continues to grow, Rio Tinto’s acquisition of Arcadium positions the company as a major supplier in the global energy transition.

The $6.7 billion deal not only strengthens Rio Tinto’s lithium portfolio but also secures its supply chain, helping the company navigate market volatility and meet future demand.

This acquisition, coming at a time of falling lithium prices, reflects the company’s commitment to investing in green energy materials and ensuring long-term success.

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