POLAND – 2024/11/13: In this photo illustration, the NVIDIA company logo is seen displayed on a smartphone screen. (Photo Illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images)
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Nvidia Shares were whipsawed as investors reacted to the US chipmaker’s third quarter earnings.
Shares of the tech giant were down 2.2% at 10:30 am, the first time they traded higher in the session. The stock had earlier fallen in premarket trading.
Investors reacted to Nvidia’s latest quarterly results, which beat both the top and bottom lines. Revenue came in at $35.08 billion, up 94% year-on-year and exceeding the $33.16 billion forecast by LSEG analysts. Earnings per share were 81 cents adjusted, also beating analysts’ expectations.
The broader semiconductor space is getting a bump from Nvidia going higher. AMDone of the closest competitors Nvidia, dropped 1.8%. Qualcomm down 0.2%. Intel an increase of 0.2%.
Nvidia largely supports the market for high-powered chips that power the world’s most advanced artificial intelligence models, such as OpenAI’s ChatGPT.
Despite nearly doubling year-over-year sales, Nvidia’s third-quarter results showed a decline from the previous quarter. Nvidia previously reported growth of 122% in the second quarter, 262% in the first quarter, and 265% in the fourth quarter of 2023.
William de Gale, the lead portfolio manager of the global technology fund BlueBox Asset Management, told CNBC the problem for Nvidia is that the stock’s demand for “crazy” GPUs has become the “bare minimum” expected from the company.
“There is a risk here … that Nvidia’s overearning will now come to an end,” he said. “There is a risk of change in this name at the moment. But exciting,” he said.
Derren Nathan, head of equity research at Hargreaves Lansdown, said in an emailed comment on Wednesday that the dip in Nvidia’s share price “suggests even the significance is not enough for some investors,” adding that he expects the stock to bounce back after the market opens.
“NVIDIA’s stellar returns to shareholders have been going strong for years now, and it’s hard to see a major hole in the investment case right now,” Nathan said.
Analysts are anticipating the launch of Nvidia’s next generation chip called Blackwell. In the firm’s earnings call, CEO Jensen Huang said that demand for chips exceeds supply.
— CNBC’s Kif Leswing contributed to this report
