Nvidia Tops $3.76 Trillion, Becomes World’s Most Valuable Company on AI Rally

Local Market Commentary

South African equities fell modestly on Wednesday, with the All Share and Top 40 indices down 0.6% and 0.7%, respectively, ending at 95,311.2 and 87,771.8 points. Focus now shifts to upcoming PPI data and the SARB's quarterly bulletin, which may offer insight into FDI trends. Meanwhile, the South African Revenue Service controversially deducted R5.07 billion earmarked for Eskom from fuel levies paid to the Road Accident Fund, despite a court interdict. On the regulatory front, the Competition Tribunal’s full reasons for blocking Vodacom’s R14 billion Maziv deal cited significant competitive risks, including infrastructure control and market dominance concerns.

European Market Commentary

A rally in European stocks hit a roadblock as investors weighed the fragility of the European equities pulled back after Tuesday's rally, with the STOXX 600 falling 0.7% as geopolitical concerns and trade uncertainty weighed on sentiment. Corporate distress indicators climbed to a nine-month high, led by retail and consumer goods sectors, according to the Weil European Distress Index. Germany remained the most distressed market, while Spain's quarterly GDP slowed to 0.6%, though annual growth held at 2.8%. Investor caution is rising amid softening demand, tight credit, and persistent geopolitical risks.

U.S. Market Commentary

U.S. equities were mixed on Wednesday as investors processed Federal Reserve Chair Jerome Powell’s congressional testimony and lingering Middle East tensions. The Nasdaq was buoyed by tech, but the S&P 500 ended flat, holding near record highs. Powell reiterated a cautious approach to rate cuts amid tariff uncertainty. Market odds now suggest a 25% chance of a rate cut in July and a 67% probability by September. New home sales dropped sharply by 13.7%, adding to the cautious outlook ahead of key GDP and PCE inflation data.

Asia Market Commentary

Asia-Pacific markets mostly declined as investors remained focused on Middle East stability and domestic monetary developments. South Korea's central bank will begin regular 14-day repo operations to address reduced liquidity, while President Lee Jae Myung urged swift approval of a $14.7 billion stimulus package. Hong Kong property prices were flat in May, supported by easing mortgage rates. Policymakers across the region continue to balance economic support with fiscal prudence amid global uncertainty.

Currency Market Commentary

The rand held steady, reflecting broader market relief following the Israel-Iran ceasefire, while investors eyed upcoming U.S. economic releases. Sterling consolidated earlier gains as risk appetite cautiously returned. Meanwhile, the dollar weakened to multi-year lows against the euro and Swiss franc amid fears of political interference in Fed policy, with speculation mounting over President Trump’s possible plans to replace Chair Powell later this year.

Commodity Market Commentary

Gold prices firmed on Thursday, supported by a weaker dollar and concerns over U.S. Federal Reserve independence following reports that President Trump considered replacing Jerome Powell. Oil extended gains after a larger-than-expected drop in U.S. crude inventories signalled robust demand. In Japan, rice prices dropped below 4,000 yen per 5-kg bag for the first time in months, potentially easing inflationary pressures and meeting a key government affordability target.

FirstRand Limited (FSR) +0.73%

FirstRand has upgraded its earnings guidance for the year ending 30 June 2025, citing better-than-expected financial and operational performance, despite subdued macroeconomic conditions across its core geographies. Advances and deposits rose in line with prior guidance, with solid momentum in corporate and commercial lending and stable performance in South Africa and the rest of Africa. Net interest income is tracking ahead of expectations, supported by effective asset-liability management, while non-interest revenue remains steady. Costs are trending below inflation, aided by a previously raised UK provision. Although retail and commercial impairments have increased slightly, core credit metrics remain within guided ranges. The group now anticipates full-year earnings growth in the low double-digit to mid-teen range—above its long-term target—with ROE sustained at 18%–22%. Resolution on the UK motor commission issue is expected by September.

Primeserv Group Limited (PMV) 0.00%

Primeserv expects a notable year-on-year earnings uplift for the year ended 31 March 2025, with EPS forecast between 40.39 and 43.64 cents and HEPS between 40.52 and 43.79 cents. This marks a 24% to 34% increase compared to FY24’s EPS of 32.57 cents and HEPS of 32.68 cents. The improvement reflects strong operational execution, with final audited results scheduled for release on or around 29 July 2025.

Oando Plc (OAO) 0.00%

Oando delivered a strong start to FY25, reporting a 90%+ jump in Q1 profit to ₦113.1 billion from ₦59.3 billion a year earlier, despite shifting from operating income to a loss of ₦120.3 billion. Revenue edged up to ₦932.6 billion, and both basic and headline EPS rose to 1 kobo, up from 0 kobo in Q1 2024, highlighting improved bottom-line efficiency in a volatile operating environment.

Nvidia Corporation (NVDA) +4.33%

Nvidia surged over 4% to a record $154.10, pushing its market capitalisation to $3.76 trillion and surpassing Microsoft as the world’s most valuable company. The rally was driven by renewed AI optimism and an upgraded price target from Loop Capital, which now sees the stock reaching $250. Despite a 60% rebound since April's tariff-related lows, Nvidia trades at 30x forward earnings—below its 5-year average—reflecting stronger earnings growth projections. The stock’s performance underscores investors’ renewed conviction in the AI-driven expansion story.

Micron Technology Inc. (MU) -0.52%

Micron exceeded Q3 expectations with revenue of $9.3 billion and adjusted EPS of $1.91, supported by nearly 50% sequential growth in high-bandwidth memory (HBM) chip sales—crucial components in AI data centres. The company raised its Q4 revenue forecast to $10.7 billion (±$300 million), ahead of the $9.88 billion consensus, and reaffirmed investment in HBM production amid rising demand from Nvidia and AMD. Micron also launched a new cloud memory unit targeting hyperscalers and projects its HBM market share to align with its DRAM footprint by H2 2025.

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