Market Watch: Nvidia, Cisco

The US midterm elections ended with a better-than-expected victory for the Democratic Party. The Democratic Party managed to maintain control of the Senate to prevent a “red wave,” and the Republican Party narrowly controlled the House of Representatives as expected. The US stock market has gained a foothold over the past month due to a period of unresolved uncertainty behind the market $Dajin Lithium Corp(DJI.CA)$ recovery of 9.9% and $S&P 500 Index(.SPX.US)$ Up 6.1%. This also happened at a time of inflation in October. Although the Federal Reserve continued to maintain a hawkish tone, CPI and PPI indicators finally showed some initial signs of slowing down.

In October, the UK inflation rate rose to 11.1%, the highest level in 41 years, which heightened concerns that the Bank of England might have to take harsher interest rate hikes than expected to curb price increases, or even cut the budget further.

As restrictions on COVID-19 testing in China continue to be relaxed, the Chinese market is also showing new momentum. This week's G20 summit saw Joe Biden and **'s first physical meeting; it gave the market a glimmer of hope that geopolitical tension might ease.

$NVIDIA(NVDA.US)$ The reported third-quarter results showed revenue down -17%, but it was still above general expectations. However, revenue guidance for the next quarter is $6 billion, which is slightly below expectations. As inventories were still normalized in the first quarter of 2023, overall performance was significantly dragged down by the gaming sector, which declined 52% year over year. Notably, total inventory is almost double what it was a year ago, reaching $4.45 billion. Nvidia has updated its gaming product cycle and has begun looking at demand for the Dutch International Group to sell out its new Ada Lovelace RTX 4090 GPU series and will begin shipping the RTX 4080. The NVDA data center division eased export restrictions to China through A800 product replacement, an increase of 31% year over year. It has also begun shipping the H100 system, its new 9th generation data center GPU. NVDA's revenue has been thriving from the pandemic and has experienced a challenging cryptocurrency winter. After falling stock prices so far this year, NVDA's price-earnings ratio for fiscal year 23/24 was 47x/36x, during which time it will launch new products for gaming and data center segments under more challenging market conditions.

$Cisco(CSCO.US)$ Reliable 1Q23 results and guidance presented were reported. Cisco's revenue increased its annual revenue growth momentum by 0.5 percentage points, reaching 4.5% to 6.5%. This is due to better supply chain conditions and price increases compared to the previous year. However, we noticed that orders for all market segments fell 14% year over year during the quarter, which means that the revenue trend is due to the completion of backlog orders from previous quarters. Like other tech companies, this is in line with a slowdown in IT capital spending for businesses, the public sector, commerce, and service providers. In terms of costs, Cisco will also restructure the company and lay off 5% of its employees this quarter. Cisco's price-earnings ratio for fiscal year 23/24 was 13x/12x.