The fall-out from Federal Reserve chair Jerome Powell's Jackson Hole speech made for a gloomy week for US stocks.
The S&P 500 at least snapped a four-day losing streak on 1 September and signs of stabilisation were evident in early trading as the influential US jobs report was bang in line with forecasts and didn't reflect a labour market which is massively overheating.
This helped generate some relief among investors that the Fed won't feel compelled to move even faster and more aggressively on rates. The central bank is still widely expected to pursue another 75 basis point rise at its next meeting later this month.
Phosphate and potash miner Mosaic (MOS:NYSE) was among the worst performers after a strong recent run as July revenue and production figures proved underwhelming. Multinational IT services and consulting business DXC Technology (DXG:NYSE) was a rare outperformer.
NVIDIA
Shares in graphics chipmaker Nvidia (NVDA:NASDAQ) fell more than 20% over five days after the company revealed the US government had restricted exports of any product with performance equal to its A100 processor or better to China, Hong Kong or Russia.
The firm added that buyers of the A100 and the newer H100 chipset, which are typically used to power data centres and other high-end applications, could be affected, and that production may have to be moved from China causing a shortage in supplies.
On Thursday, the company said the Department of Commerce had offered to allow it to continue exporting certain chips to US customers overseas, averting some of the potential supply squeeze.
Rival chipmaker AMD (AMD:NASDAQ) said it had also been hit with new licensing requirements blocking the sale of high-spec chips to China and Russia but there was unlikely to be a major impact on its business.
BROADCOM
Semiconductor maker Broadcom (AVGO:NASDAQ) delivered record results driven by robust demand across cloud, service providers and enterprise, defying fears of a slowdown.
Not only did the chipmaker beat analysts' estimates with revenues jumping 25% year-on-year to $8.5 billion and EPS (earnings per share) hitting $9.73, the company said it expected solid demand to continue.
The company guided for fourth quarter revenues of $8.9 billion, topping market expectations. Increased infrastructure spending to support the switch to hybrid working is driving demand. Broadcom makes chips for data centres, routers and Wifi modems.
This gives the firm an edge over competitors focused on chips for PC's, gaming devices and smartphones, which are suffering from flagging consumer demand in the face of red-hot inflation.
The positive outlook leaves investors hopeful of further share buybacks. The company returned a total of $3.2 billion to shareholders in the quarter, split between $1.7 billion of dividends and $1.5 billion of share buybacks.
OKTA
San Francisco-based cybersecurity firm Okta (OKTA:NASDAQ) saw its shares tumble despite churning out second quarter numbers which were ahead of expectations.
Okta reported Q2 adjusted earnings losses of -$0.10 per share, far better than the -$0.31 consensus estimate, on a 43% year-on-year jump in revenue. Sales came in at $452 million, beating the consensus estimate of $430.6 million by more than 5%. Subscription revenue grew 44% year-over-year to $435 million.
The company expects Q3 2023 revenue to be in the range of $463 million to $465 million, representing roughly 33% year-on-year growth, with EPS losses of -$0.25, versus the -$0.28 previously forecast. For the full year, to 31 January 2023, Okta expects EPS losses in the range of -$0.73 to -$0.70, on revenue around the $1.81 billion to $1.82 billion mark.
That would be 35% ahead of consensus EPS estimates for -$1.11. The reason for the negative reaction may be weak investor sentiment, particularly towards companies which, like Okta, are yet to deliver profit.
