Reality of Nvidia earnings beat wipes out Monday's spooked stock swoon | Fortune

"Nvidia was one of the strongest forces lifting the market and rose 1.4% ahead of its highly anticipated profit report, which arrived after trading ended for the day. The company whose chips are at the center of the AI revolution once again reported profit for the latest quarter that topped analysts' expectations. It also said it expects to make roughly $78 billion in revenue this quarter, when analysts had been forecasting less than $72.3 billion."

"Because Nvidia has grown to become the U.S. market's largest stock by value, it has more influence on the S&P 500 than any other company. Nvidia's profit reports have become a bellwether for the market, not only because it's so big but also because of how influential the AI boom has broadly become over the market's moves."

"More recently, though, concerns have climbed about whether companies like Alphabet and Amazon are spending so much on chips from Nvidia and other equipment that they'll never be able to make back the investments through future gains in productivity. If that leads to a pullback in spending, it would hit Nvidia directly."

U.S. stock markets rebounded Wednesday with the S&P 500 gaining 0.8%, the Dow rising 0.6%, and the Nasdaq climbing 1.3%, reversing Monday's losses. Nvidia emerged as a primary driver, rising 1.4% before reporting quarterly profits exceeding analyst expectations and projecting $78 billion in quarterly revenue versus forecasts below $72.3 billion. As the market's largest stock by value, Nvidia significantly influences broader market movements. The company's earnings serve as a bellwether for AI market sentiment. However, investor concerns persist regarding whether major companies like Alphabet and Amazon can recoup massive chip investments through future productivity gains. Additionally, investors increasingly focus on industries vulnerable to AI disruption, triggering sell-offs in software, logistics, and legal services sectors.

Read at Fortune