Wall Street had high expectations for Nvidia’s earnings, and the chipmaker met those expectations. Nvidia’s earnings, revenue, and outlook all beat analysts’ expectations, and the stock rose 5%. This move not only boosted other semiconductor manufacturers, including AMD and Broadcom, but also caused a sharp rise in the overall stock market. JP Morgan’s trading desk said: “This was a good, clean beat that delivered across all areas of scrutiny… Most of the feedback I got (from my investor base, who admittedly is a tech expert) sounded vindicated and very satisfying.” So far, the report has allayed fears that a bubble will form in the artificial intelligence industry. While the Street feels vindicated, or breathes a sigh of relief, NVIDIA stock still has a long way to go to recover. Thursday’s early gains brought Nvidia’s stock price to about $196 per share. That means the stock would need to rise another 8% to reach its intraday high of $212.19 from late October. NVDA 3M Bar NVDA 3 Month Chart Moreover, a strong financial report does not guarantee further profits in the current period. Jefferies’ trading desk noted that Alphabet (which hit a new high on Wednesday) is the only stock in the Magnificent Seven that has increased since the company released its third-quarter numbers. During this time, the stock price rose 4%. In contrast, Apple, Microsoft, and Metaplatform are falling. Amazon and Tesla posted solid gains immediately after their earnings releases, but have since fallen. Jordan Klein, TMT sector specialist at Mizuho Securities, is also skeptical about jumping on the AI bandwagon completely. “While I really like NVDA and what they’re saying, I’m a little skeptical that this print alone will be the last significant catalyst to silence all the skeptics and get full coverage of the shorts,” he wrote. “It seems too easy and fast,” Klein asked, referring to NVIDIA CEO Jensen Huang. “Maybe for a day or two, but not forever.”
