Nvidia will report second-quarter earnings in a test of investor appetite after a mass AI-stock selloff. Several tech stocks tumbled amid questions about AI-driven company valuations, including an MIT report finding 95% of AI pilots fail to grow company revenues and comments from OpenAI CEO Sam Altman warning of possible investor overhype. Nvidia reached a $4tn market cap in July but saw a 3.5% share drop earlier last week; stocks recovered ahead of the earnings report. Wall Street expects $1.01 EPS on $46.05bn revenue despite sales restrictions to China that previously cost $4.5bn. Major tech firms continue heavy AI infrastructure investment and some analysts remain bullish about expanding AI use cases.
Nvidia is set to report its second-quarter earnings on Wednesday, in a first test of investor appetite since last week's mass AI-stock selloff. All eyes will be on the chipmaker's latest financials as the company sets the tone for the rest of the AI industry after a turbulent week in the sector. Several tech stocks saw shares tumble last week amid growing questions over whether AI-driven companies are being overvalued,
Nvidia, which became the first company to reach a $4tn market cap in July, saw a 3.5% drop in shares early last week its biggest drop in months. Stocks recovered modestly by early Wednesday, in anticipation of the company's pivotal earnings report. Still, some analysts remain bullish on the so-called AI revolution, especially as major technology companies like Meta, Microsoft, Amazon and Alphabet are investing heavily in AI infrastructure.
We are still in the early days of the AI revolution as the use cases are just starting to massively expand as more companies recognize the value creation being driven by a handful of tech companies, said the Wedbush Securities analyst Dan Ives. Those companies include Nvidia, Ives said. This week will be another flex the muscles moment for Jensen [Huang] and Nvidia as well as the AI revolution bull thesis, Ives said.
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