Early Nvidia Backers Reevaluate Investments Amid Uncertainty

Some of Nvidia’s earliest Australian investors, including Munro Partners, are reducing their stakes in the company as they anticipate lower returns amidst skepticism over its ability to sustain its lofty valuation of $US3.1 trillion. Munro slashed its holding by a third, citing the need to adjust ahead of the company’s second-quarter earnings and the upcoming launch of the Blackwell chip, expected to boost future earnings. However, Nvidia’s recent revenue forecast miss and manufacturing challenges with Blackwell have raised concerns, prompting further reevaluation among fund managers and impacting semiconductor stocks globally.

MinRes Faces High-Stakes Challenge Amid Market Downturn

Mineral Resources (MinRes) is navigating a perilous path with a $5 billion debt load amid falling lithium prices and a softening iron ore market. CEO Chris Ellison has adopted a strategy focused on aggressive cost-cutting while maintaining a commitment to employees and avoiding asset sales. The company’s unique position in Australia’s resources sector, compounded by challenges from a slowing Chinese market, has made it one of the most volatile large-cap stocks. Despite the steep challenges, Ellison is confident in MinRes’ ability to emerge stronger, though the company’s future remains heavily dependent on a recovery in commodity prices.

Kmart Shines as Wesfarmers’ Profit Engine Amid Economic Headwinds

Kmart has emerged as the star performer for Wesfarmers, driving a 3.7% increase in net profit to $2.6 billion for the year, despite challenges in the energy, chemicals, and mining sectors. The discount retailer, part of Wesfarmers’ broader portfolio, saw significant sales and earnings growth as consumers sought cheaper products amidst rising living costs. Kmart’s success, particularly with its Anko product range, offset weaker performances in other divisions. However, Wesfarmers faces ongoing pressures from inflation and supply chain costs, with CEO Rob Scott warning of continued challenges in the coming year despite the company’s strong retail performance.