Nvidia Shares Dip in After-Hours Trading as Revenue Forecast Falls Short of Expectations
Santa Clara,CA – February 21,2024 – Nvidia shares fell more than 6% in after-hours trading Wednesday following the release of its fourth-quarter earnings report,as a revenue forecast that,while still substantial,fell short of analyst expectations. The tech giant reported revenue of $22.10 billion, a important 265% increase year-over-year, adn earnings per share of $5.16. Though, Nvidia projected first-quarter revenue of $20 billion, below the $22.24 billion consensus estimate.
the results come as investors closely scrutinize Nvidia’s performance as a key indicator of the health of the artificial intelligence (AI) market. Demand for Nvidia’s gpus, essential for powering AI applications, has fueled a massive rally in the company’s stock over the past year.
“A new industrial revolution has begun. The AI race has begun,” stated Nvidia CEO Jensen Huang in the earnings release.
Despite the revenue miss, Nvidia’s data center revenue surged 279% year-over-year to $18.4 billion, highlighting continued strong demand for its AI chips. However, revenue from its gaming division declined 1% to $6.05 billion.
The earnings report has injected volatility into the market, putting pressure on the nasdaq and echoing concerns of a potential correction similar to the 2022 tech downturn. The outcome will determine whether Nvidia can validate AI as a multi-year secular boom or signal early vulnerabilities in its foundation.
Traders are bracing for continued volatility,wiht some favoring long call options based on continued AI scaling,while others are hedging against potential overbuilding.
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Disclaimer: This is not financial advice. Always conduct your own research.
As of this writing, the author is long the S&P 500 and the SPDR® S&P 500 ETF and the ETF.the author is also long the Technology Select Sector SPDR ETF and periodically rebalances a portfolio of individual securities and ETFs based on macroeconomic and company financial assessments.
The views expressed in this article are solely the author’s opinion and should not be considered investment advice.
Follow Jesse Cohen on X/Twitter @jessecoheninv for further stock analysis and insights.
