Nvidia’s lead-up to Wednesday’s earnings release caused quite a stir on Wall Street despite expectations for incredible growth. After-the-bell Q3 results didn’t signal the massive selloff that had been feared, with the AI chip leader’s stock falling less than 2% in after-hours trading as management spoke to analysts on the call. of
Last quarter, modest revenue and earnings weren’t enough to stave off a massive sell-off news event, sending the stock down 18% in the week after the call. Some believed the stock could face another decline this time with institutional investors eager to engage in year-end profit-taking.
The stock was flat early Wednesday evening, however, as revenue rose 94 percent year-over-year to $35.1 billion. The company’s January guidance was also better than expected, with the chipmaker indicating that it is confident about the rollout of its next-generation Blackwell platform.
“The age of AI is in full swing, driving the global shift to NVIDIA computing,” Huang said in a press release. “The demand for Hopper and the anticipation for Blackwell—in full production—are incredible as foundation modelers pre-train, post-train and assess.”
When it comes to short-term stock movements, investors may not be completely out of the woods just yet. According to Bloomberg, options trading before the call implied less than 8 percent in either direction. That would equate to a market value of nearly $300 billion, larger than the valuations of all but the 24 largest U.S. companies.
Regardless, shareholders have been richly rewarded, especially if they bought before or around ChatGPT’s release in 2022 and the GenAI boom that follows. The stock has appreciated 800% in the past two years, with the company adding more than $3 trillion in market cap to trade with Apple as the world’s largest.
Despite Nvidia’s growth against the law of large numbers, Wall Street appears optimistic about continuing to reward investors. As of Wednesday afternoon, nearly 90% of analysts surveyed by Bloomberg (or 68 of 76) rated the stock a buy, while 8% held and less than 3% suggested a sell.
Based on recent earnings and Street expectations, the stock isn’t incredibly expensive either. Before the earnings call, the company’s diluted price-to-earnings ratio was just north of 36, according to Bloomberg. This represented only a 24% premium for the semiconductor industry.
Baird managing director Ted Mortenson said that aside from the GenAI trade, the semifinals have struggled mightily. good luck Ahead of the call, a contraction in autos and industrial demand in Europe rattled. The PHLX Semiconductor Index, commonly known as the SOX, is down about 8% year-to-date.
“Nvidia is holding up the index right now,” said Mortensen, also a tech desk sector strategist.
On Wednesday, the world’s hottest company continued to deliver.
