Nvidia shares were lower in the premarket on Thursday despite the chipmaker beating expectations and confirming demand remained robust.
It was beats all round for Nvidia in Q2 with revenue, EPS, and Q3 revenue guidance all outstripping analyst estimates.
However, such are the sky-high expectations of Nvidia, shares dipped in the premarket, as the stock followed a familiar playbook of rallying into earnings and dipping afterwards.
The gains were minimal, and the stock maintains its spot as the world’s most valuable company.
“The law of large numbers seems irrelevant here – despite its scale, Nvidia continues to defy expectations as consensus underestimates the opportunity at hand. Third-quarter revenue guidance at $54bn is a strong number, especially when it factors in no benefit from Chinese sales,” explained Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“Nvidia’s dominance in AI infrastructure remains unparalleled, cementing its position as the cornerstone of the AI revolution. With a customer base spanning cloud giants to sovereign entities and a relentless pace of product innovation, Nvidia continues to set the standard for the industry. Under the leadership of its visionary CEO, it’s proving to be the ultimate way to play the AI investment theme.“
Nvidia’s results have broad implications. It is the ultimate bellwether for the adoption of AI and is a major beneficiary of spending by the hyperscalers. The AI trade has driven global equity markets higher over the past two years, so the financial system is highly exposed to the outlook for Nvidia.
Investors will be largely reassured that momentum is intact after last night’s instalment.