Nvidia’s latest earnings report was strong, but the market was meh. Revenue is up 78% but shares are down 1.5% in after-hours after being up 3.7% in regular trading. Nvidia beat estimates but concern over industry overspending and competition kept investors cautious.
Nvidia’s Earnings Highlights
- Revenue: $39.33 billion (up 78% year over year)
- Margin: 71% (down from 73.5%)
- Blackwell AI Chips: Nvidia is ramping up production of its latest AI chips which account for 30% of sales.
Tech Giants Unmoved
Microsoft, Amazon, Meta and Alphabet, Nvidia’s big clients didn’t budge post-earnings. The so-called Magnificent Seven stocks that have fueled AI since ChatGPT came out in 2022 have been retreating from their peak valuations.
DeepSeek’s low-cost models and reports of Microsoft scaling back data centre leases have contributed to the unease. Roundhill Magnificent Seven ETF has fallen 11% since December 2024 high, indicating a broader tech pullback.
Global Market Reaction
Not just US, the global market reacted:
- TSMC: -0.47%
- Samsung Electronics: -0.18%
- SK Hynix: -1%
- Nikkei Tech Sub-Index: +0.2%
Market strategist Yeap Jun Rong said the lack of surprise in the earnings report may have been the reason for the lack of volatility.
Stock Price Outlook
Technical analysis shows support and resistance for Nvidia’s stock:
- Support: $130, $113, $96
- Resistance: $153, $255
Nvidia is the king of AI chip but the evolving competitive landscape and investor sentiment will determine the long term trend.
Conclusion
Nvidia’s stock got mixed reaction despite strong earnings. Leadership in AI computing is still intact but the market is cautious because of the industry’s overall uncertainty. How will Nvidia navigate competition and keep demand for its premium chips in the next few quarters?
