Nvidia erases $250B in market cap despite strong earnings #earningways
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Nvidia (NVDA) reported stronger-than-expected earnings during the quarter ending June but stocks of the AI giant fell by over 8%. The company posted earnings per share (EPS) of $0.68, surpassing expectations of $0.65.
The stock reaction has wiped out around $250 billion in market capitalization within minutes of the earnings call. Wall Street now awaits Blackwell, the next-gen AI chip, to hit the markets.
NVDA stock fell by at least 8% #NVDA/SOL
Shares of AI chipmaker Nvidia fell by at least 8% in extended trading, wiping $250 billion in market cap. The market reaction comes after the company reported revenue growth of 122% in Q2. However, it is the smallest margin in the last six quarters, according to Bloomberg.
Ryan Detrick, a chief market strategist at the Carson Group, explained that while Nvidia did well, the increase wasn’t as big as the previous quarters. Detrick told Reuters that Nvidia is a great company “but it appears the bar was just set a tad too high this earnings season.”
Over the past three quarters, Nvidia’s revenue grew by more than 200% each time. Therefore, it set a very high standard for the chipmaker. However, it might become harder for Nvidia to surpass the expectations it has set. Nvidia’s revenue of $32.5 billion was marginally higher than the average analyst estimate of $31.9 billion but predictions went as high as $40 billion.
“It’s less about just beating estimates now, markets expect them to be shattered,” Matt Britzman, senior equity analyst at Hargreaves Lansdown, told BBC. Britzman added that investors were expecting a bigger outperformance.
Notably, NVDA shares rose by over 160% in 2024 but investors are now pinning hopes on its delayed next-gen AI chip, Blackwell.
Nvidia says Blackwell has set ‘new standard’
Nvidia said in its latest blog the company’s graphics processing units (GPUs) have performed well.
