Nvidia bounces back, Carnival beats for seventh time in a row and Airbus woes drag down Rolls-Royce, Melrose and more

“Just as investors were starting to get worried about Nvidia’s share price entering a fourth day of declines, the chip giant has managed to shake off negative sentiment and bounce back. The stock advanced more than 5% in early trading and led its big tech counterparts higher,” says Dan Coatsworth, Investment Analyst at AJ Bell.

“What looked like a bout of profit taking in Nvidia now seems to have reversed, with investors potentially using recent share price weakness to load up on stock.

“Nvidia has beaten expectations for the last six quarters in a row. The big question on everyone’s minds is whether the AI chip giant will live up to its group nickname and make it a ‘Magnificent Seven’ in a row?

“We’ll have to wait until August to find out, but in the meantime, don’t rule out volatility in the share price as it feels like unease is growing in parts of the market and fears intensifying over the prospect of a pullback in equities after a strong run.

“A lot of people have already made good money on investing in Nvidia and that makes it an obvious choice for further profit taking if we see market jitters.”

Carnival

“Investors were keen to set sail with Carnival after its results hit the spot. Demand for cruises remains high and the company is laughing all the way to the bank.

“Carnival struggled during the pandemic and reported eight consecutive quarters in a row of earnings below expectation. The past few years have been much kinder, helped by pent-up demand for consumers to travel, and the turnaround in fortunes is clear to see.

“Its latest results represent the seventh quarter in a row that it has beaten earnings forecasts and six times in a row for sales. That’s quite an achievement and management commentary implies everything is going swimmingly.”

Airbus / Melrose / Rolls-Royce

“It is tempting to think that life will be simpler if your biggest rival is a terrible mess and Boeing’s woes are a potential boon for Airbus. However, the European firm is encountering some turbulence of its own and that is having a knock-on effect upon the companies that form part of its supply chain.

“Shares in engineers Melrose, Rolls-Royce and Bodycote slid lower, alongside those of European manufacturers MTU Aero Engines and Safran, as Airbus tumbled to a seven-month low.

“The Toulouse-based aerospace giant warned it would undershoot the targets for aircraft deliveries, profits and cash flow that it had outlined earlier this year.

“Airbus, and its suppliers, had been seen as winning ground from Boeing as the US firm grapples with a litany of reputational and technical issues surrounding its 737 Max jumbo jets. Strong demand for air travel had also boosted their share prices, which have flown higher, perhaps to the point where any unexpected bad news made them a little more exposed on the downside than some investors had believed.”

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