STOCK MARKET BLOG FEBRUARY 2024

by the CEO Silvano Grimaldi of the independent asset management company GRIMALDI & PARTNERS AG

MONTHLY REVIEW

The international stock markets ended the month of FEBRUARY with gains.

DRIVING FACTORS

Positive data on the health of the US economy. These fuel the hope that companies and consumers will be able to cope with the high interest rates well overall and that there will be no threat of recession for the time being.
Strong large-cap earnings and good economic data from the US continue to provide optimism.
Tech companies are benefiting from the hype surrounding artificial intelligence.

EQUITIES IN FOCUS

NVIDIA business continues to benefit from the AI boom

The boom in artificial intelligence continues to drive strong growth for the chip company Nvidia. In the last quarter, sales of $22.1 billion were more than three times higher than a year earlier. Analysts on average had expected $20.4 billion. The shares temporarily rose by more than eight percent in after-hours US trading.

With sales of $18.4 billion, business with technology for data centers was five times higher than in the corresponding quarter of the previous year. The Nvidia technologies, originally developed for graphics cards, have long been proven for computing work when training applications with artificial intelligence. This causes Nvidia's business - and its stock market value - to rise rapidly.

The quarterly profit jumped from 1.4 to almost 12.3 billion dollars within a year. The use of artificial intelligence has reached a turning point and demand is increasing worldwide, emphasized Nvidia boss Jensen Huang.

The outlook for the current quarter is also above expectations. Nvidia promised revenue of around $24 billion; the market had expected an average of $22 billion.

MICROSOFT most valuable company in the world

Microsoft also saw a strong increase in market value at $159.36 billion, largely due to increasing demand for its Azure cloud service. The tech giant reported higher-than-estimated quarterly profit and revenue, although investors expressed caution over rising costs, which are expected to rise "significantly" on a sequential basis. As of January 31, 2024, Microsoft's market capitalization was $2.95 trillion, surpassing that of Apple Inc's market capitalization of $2.85 trillion.

META PLATFORMS increased its market value last month

Meta's market value exceeded the $1 trillion mark for the first time since September 2021. Shares of Meta Platforms rose more than 14 percent to a record high of $451 after the bell, increasing its market capitalization by $148 billion to $1.16 trillion after the Facebook owner posted a 25 percent jump in December quarter revenue to $40.1 billion and declared its first-ever dividend.

MONTHLY OUTLOOK

The boom in artificial intelligence is currently causing rising stock prices in the USA. The outstanding quarterly results and the very good outlook from NVIDIA, the global leader in the field of AI, caught the pessimists off guard and confirmed the continuation of the stock market bull market. Nevertheless, as is well known, trees do not grow into the sky. After the brilliant start to the year on the stock markets, especially in the USA and Europe, a break in the intact upward trend would be necessary.

We expect a slight consolidation in March, but in any case the stock markets should slow down.

STOCK RECOMMENDATION: NVIDIA