Morning from Copenhagen.

NVIDIA earnings came with much less volatility than markets were anticipating yesterday, trading roughly 1% down in after-hours, with their guidance for 2025 weakening relative to consensus. While sales/revenue beat the average estimate of 37.1 bn USD (37.5 bn actual), the recent rally in NVIDIA had left expectations skyrocketing, with some estimates reaching as high as 41 bn USD. Markets were likely expecting another blowout report to fuel the end-of-year rally.

NVIDIA has been a HUGE driver of the momentum seen in equities over the past 3-4 years. Based on yesterday’s earnings report, we may be approaching a scenario where the momentum in Tech/AI will not be as explosive as we’re used to. However, indices did not experience anywhere near the volatility that was priced in—an 8% move in either direction was expected prior to the release. This morning, Bitcoin and crypto are leading the rally as the top-performing risk assets despite NVIDIA’s disappointing results, while broader US index futures are down as we speak.

An important reminder in the AI space is that government spending on GPUs and other electronics has been more or less paused since the beginning of 2024. The artificial boosts to NVIDIA’s order book have seemingly disappeared, though demand for AI remains strong overall.

Chart 1: Is NVIDIA growth slowing down?