- Brent crude at $92, 20% below the 2026 peak
- US futures stable after record-close on Wall Street
- AI sales drive massive earnings beat for Dell – – shares up 39%
- Bull run sense check – tech multiples still reasonable
Derren Nathan, head of equity research, Hargreaves Lansdown:
“The FTSE 100 is little moved this morning, failing to catch a breeze from Wall Street’s record close on Thursday. The resumption of airstrikes between the US and Iran weighed on the London index yesterday, but a reported 60-day extension to the fragile ceasefire and a possible agreement to reach an agreement seems to have settled nerves today.
What all that actually means is anybody’s guess, but oil traders are taking an optimistic view that the end could be in sight for disruption in the region, and Brent Crude oil prices have taken another step down to under $92 per barrel, around 20% off the peaks seen earlier in the month.
US stock futures have moved tentatively upwards after both the S&P 500 and NASDAQ touched new high-water marks on Thursday. Softer than expected core inflation (PCE) data for April (0.24% month-on-month) and an encouraging 0.11% in real personal consumption helped add a touch of confidence to market expectations that US base rates will remain stable for the rest of the year. According to CME’s FedWatch, the probability of a quarter-point rise fell from 38.3% to 37.1%.
But a quarter point here or there is likely to make little difference to Dell whose shares are basking in the glow of a set of forecast-crushing first quarter earnings, as the company’s ramp of its AI server business accelerates. AI server revenue growth of 757% helped underlying earnings per share more than triple to $4.86, racing past forecasts of $2.96. A 19% raise in full-year revenue guidance to around $167bn and $51.3bn backlog for AI servers suggests this is more than just a flash in the pan. Investors are rushing to get on board the AI super cycle train, pushing the shares up 39% in after-hours trading.
AI infrastructure companies have been a core driver of an incredible first-quarter earnings season for US stocks and can take much of the credit for the strong performance of the leading indices. With forward earnings multiples of the tech-led NASDAQ composite barely above the 10-year average, however, it feels like the bulls could still have further to run yet.“
