Nvidia's Subdued Forecast Dampens AI Enthusiasm in Tech Stocks

Nvidia's forecast dampens AI enthusiasm in other tech stocks

Shares of Nvidia and other technology heavyweights fell late on Wednesday, a discouraging sign for investors betting that a strong forecast from the dominant seller of AI chips would fuel fresh gains in Wall Street's most valuable companies. Nasdaq futures fell about 1% following Nvidia's quarterly earnings report, suggesting traders expect tech stocks to lose ground on Thursday. Nvidia dropped almost 7% and lost $200 billion in stock market value after it forecast third-quarter gross margins that could miss market estimates and revenue that was largely in line. A handful of other AI-related companies shed around $100 billion in combined value. Shares of Broadcom and Advanced Micro Devices were each down about 2%. Microsoft and Amazon each dipped almost 1%. If Wednesday's late-day dip in Nvidia shares extends into Thursday, it would be well short of the 11% price swing the options market had priced for the shares, according to data from options analytics firm ORATS. Surging demand for its AI chips helped Nvidia crush consensus analyst estimates for several quarters, a trend that led investors to expect the company to exceed forecasts by higher and higher margins. Nvidia's soft forecasts overshadowed a beat on second-quarter revenue and adjusted earnings as well as the unveiling of a $50 billion share buyback. "They beat but this was just one of those situations where expectations were so high. I don't know that they could have had a good enough number for people to be happy," said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. The lackluster response to Nvidia's earnings report could help set the tone for market sentiment heading into what is historically a volatile time of the year. The S&P 500 has fallen in September by an average of 0.8% since World War Two, the worst performance of any month, according to CFRA data. Investors are also watching next week's U.S. employment report for signs on whether the labor market weakness that roiled stocks in early August has dissipated. Optimism about AI technology, in part due to Nvidia's explosive growth, has fueled gains on Wall Street over the past year. However, confidence in that rally has wavered in recent weeks following an earnings season that saw investors punish shares of tech companies whose results failed to justify rich valuations. Investors have also become concerned about increases in already hefty spending by Microsoft, Alphabet and other major players in the race to dominate emerging AI technology. Microsoft and Alphabet's stocks remain down since their reports last month. Nvidia forecast revenue of $32.5 billion, plus or minus 2%, for its fiscal third quarter, compared with analysts' average estimate of $31.8 billion, according to LSEG data. That revenue forecast implies 80% growth from the year-ago quarter. The Santa Clara, California-based company expects adjusted gross margin of 75%, plus or minus 50 basis points, in the third quarter. Analysts on average forecast gross margin to be 75.5%, according to LSEG data. Nvidia's stock dropped 2.1% in Wednesday's session, ahead of its report. It remains up about 150% so far in 2024, making it the biggest winner in Wall Street's AI rally. Nvidia's stock was valued at 36 times earnings ahead of its quarterly report, inexpensive compared to its average of 41 over the past five years. The S&P 500 is trading at 21 times expected earnings, compared to a five-year average of 18. (Reporting by Noel Randewich in San Francisco; Additional reporting by Saqib Ahmed in New York; Editing by Ira Iosebashvili and Lisa Shumaker)

Nvidia's forecast dampens AI enthusiasm in other tech stocks

Shares of Nvidia and other major tech companies fell after Nvidia's quarterly earnings report. Despite beating second-quarter revenue and adjusted earnings estimates, Nvidia's forecast for third-quarter gross margins and revenue fell short of market expectations. This has raised concerns about the sustainability of the recent AI-driven rally in tech stocks.Shares of Nvidia and other technology heavyweights fell late on Wednesday, a discouraging sign for investors betting that a strong forecast from the dominant seller of AI chips would fuel fresh gains in Wall Street's most valuable companies. Nasdaq futures fell about 1% following Nvidia's quarterly earnings report, suggesting traders expect tech stocks to lose ground on Thursday. Nvidia dropped almost 7% and lost $200 billion in stock market value after it forecast third-quarter gross margins that could miss market estimates and revenue that was largely in line. A handful of other AI-related companies shed around $100 billion in combined value. Shares of Broadcom and Advanced Micro Devices were each down about 2%. Microsoft and Amazon each dipped almost 1%. If Wednesday's late-day dip in Nvidia shares extends into Thursday, it would be well short of the 11% price swing the options market had priced for the shares, according to data from options analytics firm ORATS. Surging demand for its AI chips helped Nvidia crush consensus analyst estimates for several quarters, a trend that led investors to expect the company to exceed forecasts by higher and higher margins. Nvidia's soft forecasts overshadowed a beat on second-quarter revenue and adjusted earnings as well as the unveiling of a $50 billion share buyback. "They beat but this was just one of those situations where expectations were so high. I don't know that they could have had a good enough number for people to be happy," said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. The lackluster response to Nvidia's earnings report could help set the tone for market sentiment heading into what is historically a volatile time of the year. The S&P 500 has fallen in September by an average of 0.8% since World War Two, the worst performance of any month, according to CFRA data. Investors are also watching next week's U.S. employment report for signs on whether the labor market weakness that roiled stocks in early August has dissipated. Optimism about AI technology, in part due to Nvidia's explosive growth, has fueled gains on Wall Street over the past year. However, confidence in that rally has wavered in recent weeks following an earnings season that saw investors punish shares of tech companies whose results failed to justify rich valuations. Investors have also become concerned about increases in already hefty spending by Microsoft, Alphabet and other major players in the race to dominate emerging AI technology. Microsoft and Alphabet's stocks remain down since their reports last month. Nvidia forecast revenue of $32.5 billion, plus or minus 2%, for its fiscal third quarter, compared with analysts' average estimate of $31.8 billion, according to LSEG data. That revenue forecast implies 80% growth from the year-ago quarter. The Santa Clara, California-based company expects adjusted gross margin of 75%, plus or minus 50 basis points, in the third quarter. Analysts on average forecast gross margin to be 75.5%, according to LSEG data. Nvidia's stock dropped 2.1% in Wednesday's session, ahead of its report. It remains up about 150% so far in 2024, making it the biggest winner in Wall Street's AI rally. Nvidia's stock was valued at 36 times earnings ahead of its quarterly report, inexpensive compared to its average of 41 over the past five years. The S&P 500 is trading at 21 times expected earnings, compared to a five-year average of 18.

Nvidia's forecast dampens AI enthusiasm in other tech stocks

Nvidia dragged technology heavyweights lower after the chip maker's earnings disappointed investors who had been hoping they would fuel fresh gains in Wall Street's most valuable companies, and sent stocks in Asia down on Thursday. Nasdaq futures initially dropped about 1% following Nvidia's quarterly earnings report late Wednesday, suggesting traders expected tech stocks to lose ground. Nvidia dropped almost 7% and lost $200 billion in stock market value after it forecast third-quarter gross margins that could miss market estimates and revenue that was largely in line. A handful of other AI-related companies shed around $100 billion in combined value. Shares of Broadcom and Advanced Micro Devices were each down about 2%. Microsoft and Amazon each dipped almost 1%. Weakness in tech stocks continued into Asian trade on Thursday. Nvidia's chip contractor TSMC slid 2%, and declines in other tech names weighed on shares in Tokyo and Seoul, dragging Korea's KOSPI to a two week low. Nvidia's Frankfurt-listed shares slightly pared back the after-hours move, falling 5%. Even if Wednesday's late-day dip extends into Thursday, it would be well short of the 11% price swing the options market had priced for the shares, according to data from options analytics firm ORATS. Surging demand for its AI chips helped Nvidia crush consensus analyst estimates for several quarters, a trend that led investors to expect the company to exceed forecasts by higher and higher margins. Nvidia's soft forecasts overshadowed a beat on second-quarter revenue and adjusted earnings as well as the unveiling of a $50 billion share buyback. "They beat but this was just one of those situations where expectations were so high. I don't know that they could have had a good enough number for people to be happy," said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. The lackluster response to Nvidia's earnings report could help set the tone for market sentiment heading into what is historically a volatile time of the year. The S&P 500 has fallen in September by an average of 0.8% since World War Two, the worst performance of any month, according to CFRA data. Investors are also watching next week's U.S. employment report for signs on whether the labor market weakness that roiled stocks in early August has dissipated. Optimism about AI technology, in part due to Nvidia's explosive growth, has fueled gains on Wall Street over the past year. However, confidence in that rally has wavered in recent weeks following an earnings season that saw investors punish shares of tech companies whose results failed to justify rich valuations. Investors have also become concerned about increases in already hefty spending by Microsoft, Alphabet and other major players in the race to dominate emerging AI technology. Microsoft and Alphabet's stocks remain down since their reports last month. Nvidia forecast revenue of $32.5 billion, plus or minus 2%, for its fiscal third quarter, compared with analysts' average estimate of $31.8 billion, according to LSEG data. That revenue forecast implies 80% growth from the year-ago quarter. The Santa Clara, California-based company expects adjusted gross margin of 75%, plus or minus 50 basis points, in the third quarter. Analysts on average forecast gross margin to be 75.5%, according to LSEG data. Nvidia's stock dropped 2.1% in Wednesday's session, ahead of its report. It remains up about 150% so far in 2024, making it the biggest winner in Wall Street's AI rally. Nvidia's stock was valued at 36 times earnings ahead of its quarterly report, inexpensive compared to its average of 41 over the past five years. The S&P 500 is trading at 21 times expected earnings, compared to a five-year average of 18. Read Comments

Nvidia's forecast dampens AI enthusiasm in other tech stocks

(Reuters) - Shares of Nvidia and other technology heavyweights fell late on Wednesday, a discouraging sign for investors betting that a strong forecast from the dominant seller of AI chips would fuel fresh gains in Wall Street's most valuable companies. Nvidia dropped 6% and lost over $180 billion in stock market value following its earnings report, this week's centerpiece event on Wall Street, while a handful of other AI-related companies shed around $100 billion in combined value. It forecast third-quarter gross margins that could miss market estimates and revenue that was largely in line. Shares of Broadcom and Advanced Micro Devices were each down about 2%. Microsoft and Amazon each dipped almost 1%. Surging demand for its AI chips helped Nvidia crush consensus analyst estimates for several quarters, a trend that led investors to expect the company to exceed forecasts by higher and higher margins. "They beat but this was just one of those situations where expectations were so high. I don't know that they could have had a good enough number for people to be happy," said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. The lackluster response to Nvidia's earnings report could help set the tone for market sentiment heading into what is historically a volatile time of the year. The S&P 500 has fallen in September by an average of 0.8% since World War Two, the worst performance of any month, according to CFRA data. Investors are also watching next week's U.S. employment report for signs on whether the labor market weakness that roiled stocks in early August has dissipated. If Wednesday's late-day dip in Nvidia shares extends into Thursday, it would be well short of the 11% price swing the options market had priced for the shares, according to data from options analytics firm ORATS. Optimism about AI technology, in part due to Nvidia's explosive growth, has fueled gains on Wall Street over the past year. However, investor confidence in that rally has wavered in recent weeks over concerns about increases in already hefty spending by Microsoft, Alphabet and other major players in the race to dominate emerging AI technology. Nvidia forecast revenue of $32.5 billion, plus or minus 2%, for its fiscal third quarter, compared with analysts' average estimate of $31.8 billion, according to LSEG data. The Santa Clara, California-based company expects adjusted gross margin of 75%, plus or minus 50 basis points, in the third quarter. Analysts on average forecast gross margin to be 75.5%, according to LSEG data. Nvidia's stock dropped 2.1% in Wednesday's session, ahead of its report. It remains up about 150% so far in 2024, making it the biggest winner in Wall Street's AI rally. (Reporting by Noel Randewich in San Francisco; Additional reporting by Saqib Ahmed in New York; Editing by Ira Iosebashvili and Lisa Shumaker)

Nvidia's subdued forecast dampens enthusiasm in AI chip stocks after steady rally

The company's shares were down 3.4% after it forecast third-quarter gross margins that could miss market estimates and revenue that was largely in line, spurring a selloff across chip stocks including Broadcom, Advanced Micro Devices and Arm.Nvidia shares pared some losses in premarket trading on Thursday, shaking off an earlier decline as investors stayed confident about the chip giant's growth prospects despite a forecast that fell short of lofty expectations. The company's shares were down 3.4% after it forecast third-quarter gross margins that could miss market estimates and revenue that was largely in line, spurring a selloff across chip stocks including Broadcom, Advanced Micro Devices and Arm. Nvidia has crushed Wall Street's estimates for several quarters on surging demand for AI chips, leading investors to bank on the company's penchant for routine blowout forecasts. The stock's strength has been a pillar of the market's rally through both this year and the past year - leading to what some say are ultimately insurmountable forecasts. "They beat but this was just one of those situations where expectations were so high. I don't know that they could have had a good enough number for people to be happy," said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. The forecast followed strong second-quarter earnings that topped Wall Street expectations, and the AI bellwether announced a new $50 billion share buyback as well. Shares of other chip companies also recovered some losses and were last trading down between 0.2% and 1%. U.S.-listed shares of TSMC, Nvidia's chip manufacturing partner, were last down marginally. TSMC's shares on the Taiwan bourse also closed lower as Asian tech stocks tracked weakness in Nvidia, with South Korea's KOSPI index falling to a two-week low. [.T] [.KS] "Investors want more, more and more when it comes to Nvidia," said Dan Coatsworth, investment analyst at AJ Bell. "It looks like investors might not have taken the average of analyst forecasts to be the benchmark for Nvidia's performance, instead they've taken the highest end of the estimate range to be the hurdle to clear." Analysts on average forecast second-quarter per-share profit of 64 cents, with 71 cents apiece being the highest estimate. Nvidia reported earnings of 68 cents per share. Big Tech stocks also seemed to shrug off the overhang from Nvidia's results. Shares of Google-parent Alphabet, Meta Platforms, Amazon.com and Apple were all up between 0.4% and 1.5%. "Nvidia is seen as a bit of a bellwether, but despite the numbers being a bit weak, I think people are just sort of happy that it's out of the way. The long-term AI story is still sort of intact. It's just a bit of a relief that the numbers weren't disastrous," said Ben Barringer, analyst at Quilter Cheviot. That comes as investors have also become concerned about increases in already hefty spending by Microsoft, Alphabet and other major players in the race to dominate emerging AI technology. Microsoft and Alphabet's stocks remain down since their reports last month. Nvidia delaying the production ramp-up of its next-generation Blackwell chips until the fourth quarter was not much of a concern, analysts said, with the company seeing strong demand for its current-generation Hopper chips. Nvidia also disclosed it had received requests for information from regulators in the U.S. and South Korea, adding to inquiries from the EU, UK and China previously, raising concerns of increased regulatory scrutiny on the company. "After the DOJ win over Google, large-cap tech has got to be more cognizant of regulatory intervention ... historically, the threat was a little bit toothless. But now that they've got this win over Google, investors have to pay a bit more attention to it," Barringer said. The lackluster response to Nvidia's earnings report could help set the tone for market sentiment heading into what is historically a volatile time of the year. The S&P 500 has fallen in September by an average of 0.8% since World War Two, the worst performance of any month, according to CFRA data. Investors are also watching next week's U.S. employment report for signs on whether the labor market weakness that roiled stocks in early August has dissipated. Optimism about AI technology, in part due to Nvidia's explosive growth, has fueled gains on Wall Street over the past year. However, confidence in that rally has wavered in recent weeks following an earnings season that saw investors punish shares of tech companies whose results failed to justify rich valuations. Nvidia forecast revenue of $32.5 billion, plus or minus 2%, for its fiscal third quarter, compared with analysts' estimates of $31.8 billion, according to LSEG data. That revenue forecast implies 80% growth from the year-ago quarter. The Santa Clara, California-based company expects adjusted gross margin of 75%, plus or minus 50 basis points, in the third quarter. Analysts on average forecast gross margin to be 75.5%. Nvidia's stock dropped 2.1% in Wednesday's session, ahead of its report. It remains up about 150% so far in 2024, making it the biggest winner in Wall Street's AI rally. The stock was valued at 36 times earnings ahead of its quarterly report, inexpensive compared to its average of 41 over the past five years. The S&P 500 is trading at 21 times expected earnings, compared to a five-year average of 18.

Nvidia's Forecast Dampens AI Enthusiasm in Other Tech Stocks

(Reuters) - Shares of Nvidia and other technology heavyweights fell late on Wednesday, a discouraging sign for investors betting that a strong forecast from the dominant seller of AI chips would fuel fresh gains in Wall Street's most valuable companies. Nvidia dropped 6% and lost over $180 billion in stock market value following its earnings report, this week's centerpiece event on Wall Street, while a handful of other AI-related companies shed around $100 billion in combined value. It forecast third-quarter gross margins that could miss market estimates and revenue that was largely in line. Shares of Broadcom and Advanced Micro Devices were each down about 2%. Microsoft and Amazon each dipped almost 1%. Surging demand for its AI chips helped Nvidia crush consensus analyst estimates for several quarters, a trend that led investors to expect the company to exceed forecasts by higher and higher margins. "They beat but this was just one of those situations where expectations were so high. I don't know that they could have had a good enough number for people to be happy," said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. The lackluster response to Nvidia's earnings report could help set the tone for market sentiment heading into what is historically a volatile time of the year. The S&P 500 has fallen in September by an average of 0.8% since World War Two, the worst performance of any month, according to CFRA data. Investors are also watching next week's U.S. employment report for signs on whether the labor market weakness that roiled stocks in early August has dissipated. If Wednesday's late-day dip in Nvidia shares extends into Thursday, it would be well short of the 11% price swing the options market had priced for the shares, according to data from options analytics firm ORATS. Optimism about AI technology, in part due to Nvidia's explosive growth, has fueled gains on Wall Street over the past year. However, investor confidence in that rally has wavered in recent weeks over concerns about increases in already hefty spending by Microsoft, Alphabet and other major players in the race to dominate emerging AI technology. Nvidia forecast revenue of $32.5 billion, plus or minus 2%, for its fiscal third quarter, compared with analysts' average estimate of $31.8 billion, according to LSEG data. The Santa Clara, California-based company expects adjusted gross margin of 75%, plus or minus 50 basis points, in the third quarter. Analysts on average forecast gross margin to be 75.5%, according to LSEG data. Nvidia's stock dropped 2.1% in Wednesday's session, ahead of its report. It remains up about 150% so far in 2024, making it the biggest winner in Wall Street's AI rally. (Reporting by Noel Randewich in San Francisco; Additional reporting by Saqib Ahmed in New York; Editing by Ira Iosebashvili and Lisa Shumaker)

Nvidia's forecast dampens AI enthusiasm in chip stocks

Shares of other chip firms Broadcom, Advanced Micro Devices, Arm and Micron were down between 1.6% and 2%. U.S.-listed shares of TSMC - Nvidia's chip manufacturing partner - were also 2% lower. TSMC's shares on the Taiwan bourse also closed lower as Asian tech stocks tracked weakness in Nvidia, with South Korea's KOSPI index falling to a two-week low. [.T] [.KS] The decline in Nvidia was so far well short of the 11% price swing the options market had priced for the shares, according to data from options analytics firm ORATS. Surging demand for its AI chips helped Nvidia crush consensus analyst estimates for several quarters, a trend that led investors to expect the company to exceed forecasts by higher and higher margins. Nvidia's soft forecasts overshadowed a beat on second-quarter revenue and adjusted earnings as well as the unveiling of a $50 billion share buyback. "They beat but this was just one of those situations where expectations were so high. I don't know that they could have had a good enough number for people to be happy," said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. The lackluster response to Nvidia's earnings report could help set the tone for market sentiment heading into what is historically a volatile time of the year. The S&P 500 has fallen in September by an average of 0.8% since World War Two, the worst performance of any month, according to CFRA data. Investors are also watching next week's U.S. employment report for signs on whether the labor market weakness that roiled stocks in early August has dissipated. Optimism about AI technology, in part due to Nvidia's explosive growth, has fueled gains on Wall Street over the past year. However, confidence in that rally has wavered in recent weeks following an earnings season that saw investors punish shares of tech companies whose results failed to justify rich valuations. Investors have also become concerned about increases in already hefty spending by Microsoft, Alphabet and other major players in the race to dominate emerging AI technology. Microsoft and Alphabet's stocks remain down since their reports last month. Nvidia forecast revenue of $32.5 billion, plus or minus 2%, for its fiscal third quarter, compared with analysts' average estimate of $31.8 billion, according to LSEG data. That revenue forecast implies 80% growth from the year-ago quarter. The Santa Clara, California-based company expects adjusted gross margin of 75%, plus or minus 50 basis points, in the third quarter. Analysts on average forecast gross margin to be 75.5%, according to LSEG data. Nvidia's stock dropped 2.1% in Wednesday's session, ahead of its report. It remains up about 150% so far in 2024, making it the biggest winner in Wall Street's AI rally. Nvidia's stock was valued at 36 times earnings ahead of its quarterly report, inexpensive compared to its average of 41 over the past five years. The S&P 500 is trading at 21 times expected earnings, compared to a five-year average of 18. (Reporting by Noel Randewich in San Francisco; Additional reporting by Saqib Ahmed in New York, Aditya Soni and Kanchana Chakravarty in Bengaluru; Editing by Ira Iosebashvili, Lisa Shumaker, Mark Potter and Saumyadeb Chakrabarty)

Nvidia's forecast dampens AI enthusiasm in other tech stocks

It forecast third-quarter gross margins that could miss market estimates and revenue that was largely in line. Shares of Broadcom and Advanced Micro Devices were each down about 2%. Microsoft and Amazon each dipped almost 1%. Surging demand for its AI chips helped Nvidia crush consensus analyst estimates for several quarters, a trend that led investors to expect the company to exceed forecasts by higher and higher margins. "They beat but this was just one of those situations where expectations were so high. I don't know that they could have had a good enough number for people to be happy," said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. The lackluster response to Nvidia's earnings report could help set the tone for market sentiment heading into what is historically a volatile time of the year. The S&P 500 has fallen in September by an average of 0.8% since World War Two, the worst performance of any month, according to CFRA data. Investors are also watching next week's U.S. employment report for signs on whether the labor market weakness that roiled stocks in early August has dissipated. If Wednesday's late-day dip in Nvidia shares extends into Thursday, it would be well short of the 11% price swing the options market had priced for the shares, according to data from options analytics firm ORATS. Optimism about AI technology, in part due to Nvidia's explosive growth, has fueled gains on Wall Street over the past year. However, investor confidence in that rally has wavered in recent weeks over concerns about increases in already hefty spending by Microsoft, Alphabet and other major players in the race to dominate emerging AI technology. Nvidia forecast revenue of $32.5 billion, plus or minus 2%, for its fiscal third quarter, compared with analysts' average estimate of $31.8 billion, according to LSEG data. The Santa Clara, California-based company expects adjusted gross margin of 75%, plus or minus 50 basis points, in the third quarter. Analysts on average forecast gross margin to be 75.5%, according to LSEG data. Nvidia's stock dropped 2.1% in Wednesday's session, ahead of its report. It remains up about 150% so far in 2024, making it the biggest winner in Wall Street's AI rally. (Reporting by Noel Randewich in San Francisco; Additional reporting by Saqib Ahmed in New York; Editing by Ira Iosebashvili and Lisa Shumaker)

Nvidia's subdued forecast dampens enthusiasm in AI chip stocks after steady rally

Paid parking in Dubai: Residents face up to Dh4,000 extra yearly costs when new rates kick in Nvidia shares pared some losses in premarket trading on Thursday, shaking off an earlier decline as investors stayed confident about the chip giant's growth prospects despite a forecast that fell short of lofty expectations. The company's shares were down 3.4 per cent after it forecast third-quarter gross margins that could miss market estimates and revenue that was largely in line, spurring a selloff across chip stocks including Broadcom, Advanced Micro Devices and Arm. Nvidia has crushed Wall Street's estimates for several quarters on surging demand for AI chips, leading investors to bank on the company's penchant for routine blowout forecasts. The stock's strength has been a pillar of the market's rally through both this year and the past year - leading to what some say are ultimately insurmountable forecasts. "They beat but this was just one of those situations where expectations were so high. I don't know that they could have had a good enough number for people to be happy," said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. The forecast followed strong second-quarter earnings that topped Wall Street expectations, and the AI bellwether announced a new $50 billion share buyback as well. Shares of other chip companies also recovered some losses and were last trading down between 0.2 per cent and 1 per cent. US-listed shares of TSMC, Nvidia's chip manufacturing partner, were last down marginally. TSMC's shares on the Taiwan bourse also closed lower as Asian tech stocks tracked weakness in Nvidia, with South Korea's KOSPI index falling to a two-week low. "Investors want more, more and more when it comes to Nvidia," said Dan Coatsworth, investment analyst at AJ Bell. "It looks like investors might not have taken the average of analyst forecasts to be the benchmark for Nvidia's performance, instead they've taken the highest end of the estimate range to be the hurdle to clear." Analysts on average forecast second-quarter per-share profit of 64 cents, with 71 cents apiece being the highest estimate. Nvidia reported earnings of 68 cents per share. Big Tech stocks also seemed to shrug off the overhang from Nvidia's results. Shares of Google-parent Alphabet, Meta Platforms, Amazon.com and Apple were all up between 0.4 per cent and 1.5 per cent. "Nvidia is seen as a bit of a bellwether, but despite the numbers being a bit weak, I think people are just sort of happy that it's out of the way. The long-term AI story is still sort of intact. It's just a bit of a relief that the numbers weren't disastrous," said Ben Barringer, analyst at Quilter Cheviot. That comes as investors have also become concerned about increases in already hefty spending by Microsoft, Alphabet and other major players in the race to dominate emerging AI technology. Microsoft and Alphabet's stocks remain down since their reports last month. Nvidia delaying the production ramp-up of its next-generation Blackwell chips until the fourth quarter was not much of a concern, analysts said, with the company seeing strong demand for its current-generation Hopper chips. The stock was valued at 36 times earnings ahead of its quarterly report, inexpensive compared to its average of 41 over the past five years. The S&P 500 is trading at 21 times expected earnings, compared to a five-year average of 18.

Nvidia earnings spark rare share price fall across US tech stocks

US tech stocks are falling despite Nvidia, the chipmaker driving the artificial intelligence (AI) led stock market boom, reporting stronger than expected earnings. The company, which has been the darling of US markets with shares up 150% this year alone, reported second quarter revenue of just over $30bn - more than double the sum achieved in the same period a year ago. Nvidia's crucial forecast for sales in the current quarter, $32.5bn, also beat estimates. Money latest: Capital gains tax hike on the way, leading advisory firm says But its shares suffered a rare decline in value following an earnings update, of up to 6.8% in after-hours dealing. That built on losses of more than 2% during Wednesday's main trading hours. Customers, including Meta and Amazon, were also hit but the red figures were around the 1% mark for both. The fortunes of Nvidia, which holds 80% of the AI chip market, are being closely-watched for signals that the big investment opportunity that is AI remains on a solid upwards curve. Confidence wobbled at the start of August when US data raised fears of a recession, sparking a short-lived but sharp global stock sell-off that sent investors towards safe-haven government bonds. For Nvidia a recession, while seen as very unlikely, would be a risk to demand for AI and, therefore, its products. Its prospects and success to date has earned it a lofty market value of $3.2trn, according to LSEG data. The shares are 3,000% up since 2019. But the meteoric rise, that has left Nvidia just behind Apple in terms of market value, has raised fears of a repeat of the dot-com bubble bursting two decades ago. Tech stocks have outperformed the market and are seen as vulnerable to shocks on a value versus earnings basis. Worries over a design-led delay in the launch of Nvidia's upcoming Blackwell chips have contributed to recent price wobbles, though the shares have largely held up as its existing Hopper chips were seen as filling any short term void. Read more from Sky News: Thames Water seeks 52% hike to bills by 2030 One in two LGBT+ workers bullied or harassed, survey finds Lego drive for green bricks is raising costs Nvidia said on Wednesday that it had already shipped Blackwell pilots to customers and partners. It expected sales to ramp up from the end of the year. Traders in the US equity options market had expected the earnings report to spark a more than $300bn swing in the shares in advance of the release being made public. But analysts said that the share price declines seen instead may reflect jitters on the value question. Matt Britzman, senior equity analyst at Hargreaves Lansdown, said of the update: "Nvidia continues to defy gravity with its seventh straight quarter beating expectations on both the top and bottom line, showing a masterful delivery of performance and guidance from Jensen Huang and the Nvidia team. "But early trading suggests that's not enough to keep the market happy. It's less about just beating estimates now, markets expect them to be shattered and it's the scale of the beat today that looks to have disappointed a touch."

Blockbuster Nvidia earnings beat Wall Street's sky-high expectations

Chipmaker, third most valuable company in world, records $30.04bn in revenue, showing AI demand continues to rise Chipmaker Nvidia reported its latest financial results on Wednesday, recording $30.04bn in revenue over the past three months - a 122% jump from the year prior - and showing that artificial intelligence investment mania shows no signs of cooling. The importance of Nvidia's earnings results to Wall Street can hardly be overestimated - the company represents 6% of the total value of the S&P 500, currently the third most valuable company in the world by market capitalization at $3.1tn. The index has gained 27% over the past 12 months, but Nvidia is individually up 167% over the same period. But because big tech is driving US stocks to new record highs, and because spending on Nvidia is seen as a signal of future tech earnings, Nvidia's results are a key barometer of the US stock market. The company also reported $0.68 in earnings per share and announced a $50bn stock buy-back. Analysts had anticipated about $28.7bn in revenue and $0.64 per share for the quarter, compared to $13.5bn in revenue a year earlier. Profits were seen at $15.1bn, up from about $6.2bn a year earlier. The company's last earnings, released in May, showed quarterly growth of 18% and annual revenue growth of 262%. Against that extraordinary precedents, anything less than a repeat could be seen as a disappointment. Recent earnings reports from Nvidia's main big tech customers, Microsoft, Amazon, Meta, and Google, which use the company's chips to build and train their own AI models, indicated higher capital spending as AI demand continues to rise. Wedbush analyst Dan Ives expected a "showstopper performance" and called Nvidia's earnings call "the most important week for the stock market this year and potentially in years". Ives estimates that for every $1 spent on an Nvidia GPU chip, there is a $8-$10 multiplier across the tech sector. "In a nutshell, we expect another drop-the-mic performance from Nvidia, as right now Jensen & Co are the only game in town with $1tn of AI Cap-Ex on the way for the next few years with Nvidia's GPUs the new oil and gold in this world," he added. The expectations are so high, in fact, that Ameriprise Financial's Anthony Saglimbene told Bloomberg that the results could have more impact on the overall market than Federal Reserve chair Jerome Powell's speech last week at Jackson Hole, Wyoming. But placing so much emphasis on a single stock itself rests on the concept that AI will boost global productivity over the coming decades. The enormous $100bn annual investment into AI has yet to translate into profits for big tech, and its not yet clear when they will arrive. Conversely, a disappointing set of results could leads to doubts - and that we are at peak AI hype. That's led to comparisons to the late 1999 Internet bubble when the sector crashed but later recovered as the online world we know today on its skeletal remains. In his market hand-holding mode, Ives said in a note that investors may worry about the huge spending, but the circumstances are more like 1995, when investment was pouring into the internet's infrastructure, and not like 1999 when the bubble burst. "Tech earnings season has only bolstered and validated this bullish view of tech stocks heading into year-end and 2025," Ives says. But lingering concerns remain. Nvidia has told customers that its next-generation AI chips, code-named Blackwell, will be delayed several months from January. As with Microsoft in the early 2000s, regulators are hovering over Nvidia. Earlier this month, the US Department of Justice launched an antitrust investigation into the tech giant. Rival chipmakers have alleged the company has abused its market dominance to corner the market and coerce its customers into continuing to purchase its products.

Nvidia stock down as tech firm fails to impress with Q3 revenue...

Nvidia posted strong quarterly results after Wednesday's closing bell but forecast a third-quarter gross margin that could miss market estimates -- putting a damper on investors who have driven a dizzying rally in the AI chip giant. Shares of the Santa Clara, Calif.-based company -- which have risen more than 150% this year -- fell 3% in extended trading after it closed the regular session down 2%. The world's second most valuable company, led by CEO Jensen Huang, took a slight hit after it forecast revenue of $32.5 billion for the third quarter, compared with analysts' average estimate of $31.77 billion, according to LSEG data. It posted revenues for the three months ended in July of $30 billion, up 15% from the previous quarter and up 122% from a year ago. Nvidia added that it expected several billion dollars in revenue from its latest Blackwell chips in the fourth quarter, addressing wide-spread concerns of reported production delays hampering growth. Investors had lofty expectations from the chipmaker, following a more than seven-fold surge in Nvidia's shares over the last two years, making it one of the biggest beneficiaries of a rally in AI-linked shares. Such was the hype around the company's second-quarter results that there was an unofficial watch party for the firm's livestream event organized at an Irish pub in Manhattan. The California tech giant that produces semiconductors used to power artificial intelligence technology briefly became the most valuable company in the world in June, surpassing Microsoft and Apple. It's $3.1 trillion market cap trails only the $3.4 trillion value of the iPhone manufacturer. Nvidia has roughly 80% of the AI chip market, including the custom AI processors made by cloud computing companies like Google, Microsoft and Amazon. "(Nvidia) alone has been a huge contributor to the overall profitability of the S&P 500," said Steve Sosnick, chief strategist at Interactive Brokers. "It's the Atlas holding up the market." Earlier this week, The Post was among a number of media outlets to report on the company's highly competitive working environment. Current and former employees at Nvidia, quoted by the Bloomberg news agency, described the "pressure cooker" demands of seven-day work weeks, long office hours with regular 2 a.m. finishes and frequent shouting matches and fights at meetings. But the firm boasts a relatively low worker attrition rate due to the fact that its employees are given stock grants that typically vest over a four-year period. Since 2019, Nvidia's stock has surged by 3,776% -- meaning employees who have been working at the company for the past five years are likely to be millionaires. That generous stock compensation package is a powerful incentive for employees to withstand the grind and remain at the company. Huang, whose net worth is estimated to be $111 billion by the Bloomberg Billionaires Index, claims he is reluctant to fire employees, opting instead to "torture them into greatness." He said his approach to employees has been key to the success of Nvidia. "When you fire somebody, you're saying, a lot of people say: 'it wasn't your fault', or 'I made the wrong choice', or 'there are very few jobs'," Huang said during an interview in June when asked why he doesn't fire people. Last year, 5.3% of employees left Nvidia. But after the company's market capitalization exceeded $1 trillion, the rate of worker attrition fell to just 2.7%. In the semiconductor industry, the rate of employee turnover is much higher -- 17.7%, the company claims. Employees who have been with the company for a decade have more than enough money to retire, but instead are opting to stay on because they anticipate a larger windfall when the next stock grant vests. Bloomberg reported how newly minted multimillionaire employees at the company brag about new vacation homes they were buying, as well as snapping up tickets to the Super Bowl and NBA Finals.