Topline
Nvidia’s stock declined on Thursday despite the world’s largest company reporting record profits and revenue through its latest quarter, a worrying sign that concerns over an AI bubble persist despite the chipmaker’s upbeat results.
The AI giant reported earnings that surpassed Wall Street’s expectations.
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Key Facts
Shares of Nvidia dropped 4.5% to around $186.75 as of Thursday afternoon, marking the largest intraday decline for the stock so far this year.
Nvidia on Wednesday reported $68.1 billion in quarterly revenue and $1.62 earnings per share, beating consensus analyst estimates of $66.1 billion and $1.54, respectively, according to FactSet, after data revenue increased 75% year-over-year to a record $62.5 billion.
The chipmaker also forecast $78 billion in revenue in its current fiscal quarter, well above analyst estimates of $72.6 billion.
A stock decline for Nvidia following its earnings came as a surprise to economists: Morgan Stanley analysts wrote in a note that Nvidia’s report was the “largest, cleanest beat and raise in the history of the [semiconductor] industry,” but HSBC said, despite the company’s strong results, it may have been “lacking new narratives” for investors.
“The stock response suggests investors were left wanting more,” JPMorgan analysts wrote, adding they believed the downturn might be tied to “continued uncertainty” around the growth of Nvidia’s data center business.
This is a developing story.