Trending tickers: Nvidia | Cineworld | United Utilities | Fevertree

The latest investor updates on stocks that are trending on Thursday

·5-min read
The nVIDIA booth is shown at the E3 2017 Electronic Entertainment Expo in Los Angeles, California, U.S. June 13, 2017.  REUTERS/ Mike Blake
Nvidia is on track to break a stock market record held by Apple in the US. Photo: Mike Blake/Reuters

Nvidia (NVDA)

Chipmaker Nvidia is expected to rack up the biggest one-day jump in valuation in US company history when markets open on Wall Street after it forecast revenues that surprised analysts.

Nvidia reported revenues of $7.19bn (£5.81bn) for the first fiscal quarter ended April 30, down 13% from a year ago. But it beat expectations on Wall Street in the quarter.

The maker of AI and graphics chips said it had record data centre revenue of $4.28bn, up from 14% from a year ago. That’s a sign that data centre customers are on a recovery path.

The California-based company gained as much as 29% in extended US trading, on course for a record high, after saying it expects about $11bn of sales in the three months ending July.

If the gains hold when markets open across the pond, the company will add $219bn to its current market cap of $755bn in a single day, breaking Apple’s (AAPL) November 2022 record of a $191bn leap.

Nvidia is the biggest maker of the advanced chips required to train a new generation of AI services.

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AJ Bell investment director Russ Mould said: “The AI revolution may be making a lot of noise but results from microchip firm Nvidia hint at some substance behind the hype.

“The company is one of the key businesses behind the infrastructure which is powering AI and its blockbuster earnings helped power the shares to a record high after the bell on Wall Street last night.

“Nvidia is finding a bit of an edge thanks to its ability to build world-leading AI supercomputing systems rather than just chips. It’s increasingly clear that in the AI arms race Nvidia has a key part to play.”

Cineworld (CINE.L)

Cineworld has revealed that it has secured further backing from lenders for its restructuring plan, after filing for bankruptcy in the US last year.

The company – which filed for the protection order to give itself time to reorganise its debts and assets – said it had struck a deal with lenders controlling nearly all of its revolving credit facilities, and 69% of its outstanding debts, meaning it can move forward with a restructuring plan, and in effect have a fresh start, later this summer.

However, shareholders will still be wiped out, with the group confirming the announcement would not provide any relief for investors.

It said: 'In light of the level of existing debt that is proposed to be released under the Group Chapter 11 Companies’ plan of reorganisation, the Proposed Restructuring does not provide for any recovery for holders of Cineworld’s existing equity interests.'

The group is moving forward with plans to restructure its roughly $5bn (£4.04bn) debt pile in an effort to exit the Chapter 11 bankruptcy during the first half of this year.

Cineworld, which also runs the Picturehouse chain, stressed that it is continuing to run its venues "as usual without interruption".

United Utilities (UU.L)

The UK’s largest water company, United Utilities, saw pre-tax profits slump by 27.7% as it reported a boosted dividend payment of £310m to its shareholders.

United Utilities’ recorded an operating profit of £441m in the year to 31st March, down from £610m in the same period a year ago. The company blamed falling profits on the rising price of electricity and chemicals.

The company's revenue dipped by 2.1% to £1.8bn in the year. It added that around £40m of the reduction will be recoverable in two years' time under the revenue control.

“United Utilities appear to have a leak in their profit pipeline as we saw operating profits take a tumble. In return for providing a reliable and affordable water supply to North West England, the regulator allows the group to earn an acceptable return,” Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said.

“The only issue is, high levels of inflation are really taking their toll on costs. Coupled with lower revenues as customers are actively being encouraged to save water, it’s no surprise to see profits dry up,” he added.

United Utilities increased its full-year dividend 4.6% to 45.51p.

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In March, the water company faced a legal challenge in the Supreme Court, after claims from a Manchester-based shipping company that its sewage disposal practices were similar to acts of trespass or nuisance under British law.

Fevertree (FEVR.L)

Premium mixer makers Fevertree have reiterated full-year guidance of revenues between £390m and £405m.

The firm said inflationary cost pressures remain elevated but it expects to mitigate these and drive margin improvements, meaning “we're on-track to deliver EBITDA in-line with our guidance range of £36m to £42m for 2023”.

Ahead of its AGM this Thursday, the drinks maker told investors that Fever-Tree recorded its highest ever value share during the first leg of the year of six per cent, as it pushed out a range of new cocktail mixers to consumers.

Separately, Fevertree announced that senior independent director Coline McConville will step down from the board at the conclusion of the company’s AGM. McConville will be succeeded by Kevin Havelock.

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