Josh Gilbert, market analyst at eToro, shares his three things to watch in Australia in the coming days.
Nvidia earnings
Cancel your Thursday morning plans; Nvidia is reporting its quarterly earnings.
Can the AI stalwart beat expectations and raise Q4 guidance again? The answer is yes.
Once again, this is the key driver of a potential price boost for the stock. The market expects Nvidia to beat estimates and it expects it to raise its guidance significantly, building plenty of optimism for 2025.
Nvidia’s data centre revenue is seeing huge growth on the back of the AI spending frenzy from big tech. Once again this quarter, tech stocks increased their capital expenditures and that spending is going to the best in the business: Nvidia.
This is a clear early sign that sales will remain robust as other tech giants race to increase their own profit from their burgeoning AI investments.
The ramp-up of Nvidia’s Blackwell GPU chips will remain an area of focus. CEO Jensen Huang has said that demand for Blackwell is ‘insane’.
Last month, it was announced that the cutting-edge GPU was already sold out for the next 12 months and the impact of this long-term high demand will likely continue to be a welcome presence in these quarterly earnings reports.
The company’s $50 billion buyback program – announced last quarter – has also now been approved by its board.
These stock buyback programs are often a sign that a company believes its shares are undervalued. Given NVIDIA’s incredible run in this bull market so far, this inferred belief would indicate that the company’s management believes a strong 2025 is all but assured.
RBA minutes
This Tuesday, we receive the minutes from the RBA’s most recent monetary policy meeting – the second-last one for the year.
With a rate cut now seemingly slipping away in the first quarter of 2025, the minutes will hopefully reveal some of the benchmarks for loosening policy.
With inflation still persistent in Australia, the RBA will likely face higher scrutiny from the public and parliament following the January inauguration of Donald Trump’s presidency in the US.
Trump has signalled a wide array of ambitious monetary policies, particularly the formation of a US bitcoin reserve, and has also signalled a desire to erode the independence of the US Federal Reserve.
Should these moves go ahead, the immediate ripple effect could encourage similar policy positions here. There is also the risk that some of Trump’s more brazen policies and appointments could lead to accelerated inflation in the US, which in turn could affect Australian monetary policy.
Even amidst the US crypto hype and bitcoin all-time highs, RBA head Michele Bullock seems unlikely to entertain cryptocurrency support during her tenure.
At last week’s Australian Securities and Investments Commission annual forum, Bullock said she “didn’t understand” cryptocurrency and insisted “it’s not a currency, it’s not money”, indicating she saw no role for it in the Australian economy.
These comments are interesting as they come at a time when the RBA is actively seeking industry participation in its Central Bank Digital Currency (CBDC) project.
It’s a big week overall for RBA statements. Assistant Governor Christopher Kent will provide an address this evening and Bullock will return to the stage Thursday to speak at the Women in Payments Symposium.
The bottom line is the RBA heads seem focused almost exclusively on taming inflation – where this will leave Australia as the crypto world rapidly heats up remains to be seen.
Can Ethereum shine after underperformance?
Bitcoin’s (BTC) run of record highs doesn’t seem to be done for the year just yet, thanks to a confluence of factors maintaining this bull market’s momentum. However, it isn’t just BTC benefitting from the culmination of Trump’s election victory, robust US economy and growing institutional appetite.
After a lacklustre performance since a price drop in August, Ethereum (ETH) has now begun to see some price recovery following the results of the US presidential election.
ETH has been up 17% this past month, currently priced at US$3,000, and has been sitting at its highest price since early August.
Although the cryptoasset is still not near its all-time high (US$4,878 in 2021), BTC’s recent rally and renewed investor focus on cryptocurrencies due to the election outcome means that a new all-time high for ETH is not entirely off the table for 2024, with the cryptoasset building some bullish momentum this month.
Although not as impressive as BTC’s 100% YTD climb, ETH is still up 30% YTD, and ongoing bullishness in the crypto community may just continue to push ETH further towards its 2021 high. This run is still yet to exhibit the ‘euphoria’ levels from retail investors that we’ve seen in previous cycles.
Quite simply, no asset goes up in a straight line forever, and volatility is set to stay high, so it wouldn’t be a surprise to see BTC - and other cryptoassets, including ETH - take a breather at some point. Even so, it’s hard to look past the possibility of BTC closing in on six figures and reaching the illustrious $100,000 mark by year’s end.