Nvidia's $68.1bn Quarter Fails to Spark Rally; FTSE 100 Hits Record

Introduction

Nvidia reported a record quarterly revenue of $68.1bn for October–December 2025 but the stock barely moved, closing only 0.2% higher after a brief after-hours rally. The company reiterated strong near-term growth with guidance for the current quarter at $78.0bn. Meanwhile the FTSE 100 climbed to a fresh high as Rolls‑Royce, Howden Joinery and London Stock Exchange Group (LSEG) led gains.

Nvidia: exceptional numbers, muted market reaction

• Revenue (Oct–Dec 2025): $68.1bn, up 73% year‑on‑year and 20% quarter‑on‑quarter.
• Forward revenue guidance: $78.0bn for the current quarter.
• Management commentary highlighted rapid enterprise adoption of AI agents and strong demand for the Blackwell chip.

Nvidia’s CEO described enterprise uptake of agents as “skyrocketing,” and the company said accelerated computing and AI were the primary demand drivers. Despite the blowout numbers and stronger guidance, investor response was muted. Market commentary points to three proximate causes:

1. Valuation complacency: Nvidia shares have risen approximately 1,300% over the last five years, leaving little room for upside after very high expectations were already priced in.

2. Guidance clarity: the conference call provided limited incremental detail on the revenue outlook and hyperscaler capex beyond the numeric guidance, which tempered enthusiasm.

3. Broader AI anxiety: investors remain sensitive to concerns that AI could disrupt incumbents, change software monetization, and introduce macro risks to employment and credit.

Quotable, data‑driven summary: "Record $68.1bn revenue and $78.0bn guided for the next quarter underscore durable demand for AI compute — yet valuation and clarity on sustained AI capex drove a muted share reaction."

Market context: where the money moved

• FTSE 100: reached 10,825 points, up 18 points (0.15%).
• Rolls‑Royce: up 5.5% after reporting a 40% jump in profits and upgrading mid‑term targets.
• Howden Joinery: led risers, up 7.4% after a 5.1% rise in pre‑tax profits.
• LSEG: up 4.8% with pre‑tax profits up 56.5%; management highlighted AI-driven operating leverage.

These moves show flows into improved cyclical and UK large‑cap earnings stories even as headline US mega‑cap tech reactions remain subdued.

Ocado: cost cuts and headcount reduction

• Planned job cuts: ~1,000 roles (~5% of global workforce), about two‑thirds in the UK.
• Targeted cost savings: £150m reduction in technology and support spend.
• Share reaction: early trading down nearly 10%; shares at 215p versus a 2010 IPO price near 180p and a 2020 pandemic peak above £26.

Ocado is repositioning after a significant robotics and automation investment phase, signalling a shift of R&D toward areas with clearer paths to value and an aim to return to positive cash flow in the current financial year.

EBRD and macro risks: trade, geopolitics and debt burdens

The European Bank for Reconstruction and Development (EBRD) updated its forecasts and flagged persistent uncertainty on trade and geopolitical fronts. Key macro figures from the EBRD release:

• EBRD regional GDP growth forecast: 3.6% for the year (up from 3.4% in prior forecasts).
• Government interest payments highlighted as a fiscal pressure point: 89% of revenues in Egypt; >30% in Kenya; >20% in Nigeria, Ghana, Senegal and Jordan.

The EBRD emphasised supply‑chain evolution and potential new integration opportunities tied to emerging industries including AI, while warning that tariff front‑loading may delay the full effects of trade policy shocks.

Global equities snapshot

• Japan’s Nikkei hit an intraday high above 59,000 (59,332) and closed at a record 58,753 as software‑related stocks rallied.
• US futures and Nasdaq e‑mini were higher in response to Nvidia’s numbers but the underlying risk‑reward debate for AI capex remains active.

Market agenda (select events)

• 08:30 GMT: Christine Lagarde testifies to the European Parliament's Committee on Economic and Monetary Affairs (ECON).
• 09:30 GMT: UK ONS releases quarterly NEETs data.
• 13:30 GMT: US weekly jobless claims published.

These data points can drive short‑term volatility in rates, FX and equity risk sentiment.

Key data points traders and analysts should note

• Nvidia revenue (Q4 Oct–Dec 2025): $68.1bn; guidance: $78.0bn.
• Nvidia five‑year share gain: ~1,300%.
• FTSE 100 level: 10,825 (+18, +0.15%).
• Rolls‑Royce profit uplift: +40% year‑on‑year; shares +5.5%.
• LSEG pre‑tax profit increase: +56.5%; shares +4.8%.
• Howden Joinery pre‑tax profit: +5.1%; shares +7.4%.
• Ocado headcount reduction: ~1,000 roles (~5%); targeted £150m cost savings; shares down ~10% in early trading; shares at 215p.
• EBRD regional GDP forecast: 3.6%; government interest payments as share of revenue: Egypt 89%, Kenya >30%, several economies >20%.
• Nikkei intraday high: 59,332; close: 58,753 (all‑time closing high).

Tactical takeaways for professional investors

• For AI exposure: strong revenue and guidance from Nvidia highlight durable demand for AI compute. However, elevated valuation marks and limited detail on long‑term hyperscaler capex keep near‑term upside constrained.
• For UK equity exposure: the FTSE 100’s record reflects concentrated moves in industrials and financial/market infrastructure names benefitting from company‑specific improvements.
• For risk management: monitor upcoming macro prints (jobless claims, ONS data) and earnings commentary for signs of capex re‑phasing by hyperscalers, which would materially affect AI hardware demand cycles.

Conclusion

The market’s split reaction — blockbuster operational numbers from Nvidia but a muted share response, alongside a record FTSE 100 driven by UK corporates — underscores a two‑speed market: select mega‑cap AI beneficiaries showing strong fundamentals while investors demand clearer visibility on durable AI capex and monetisation. Maintain disciplined position sizing and watch hyperscaler capex commentary and near‑term macro releases for the next directional cues.