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Nvidia (NVDA) posted its second quarter earnings report after the closing bell on Wednesday. The chip giant beat analyst expectations on both the top and bottom lines, yet its results failed to impress investors' sky-high expectations, sending shares downward in Thursday's session.
US Bank Wealth Management senior investment strategist Rob Haworth joins Market Domination to break down Nvidia's earnings and what investors are looking for moving forward.
"What we saw is investors were somewhat disappointed with the beat. I mean, you had this beat of expectations on the Nvidia side. It's still fairly good news for the future there. But it wasn't quite as good as investors hoped. And I think the challenge is we may be moving kind of past that peak acceleration in artificial intelligence spending. And that's maybe some of the concern we're seeing here," Haworth explains.
He adds that expectations aren't keeping up with where the market (^DJI, ^IXIC, ^GSPC) is priced, leading to Nvidia's sell-off seen in Thursday trading. He notes that the phenomenon is also being seen in other tech companies, indicating a rotation occurring in the market.
for on these moves. We're gonna welcome in here, Rob Hayworth, US Bank, Wealth Management Senior Investment Strategist. Rob, I actually want to start with uh, Nvidia, Rob. I am curious what you made of that print. It's solid report, Rob, solid guide, uh, clearly investors wanted to see more. What did you make of that report, Rob, and also the response to the report?
Well, I think in the response what we saw is, is investors were somewhat disappointed with the beat, right? I mean, you, you had this uh, beat of, of expectations on the Nvidia side. Uh, it's still fairly good news for the future there, uh, but it wasn't quite as good as investors hoped. And I think the challenge is, we may be moving kind of past that peak acceleration in artificial intelligence spending. And that's maybe some of the concern we're seeing here that it, it just, uh, expectations won't be able to keep up with where the market is priced. And that's some of what I think we're seeing in the sell-off today between Nvidia, but also other tech names are, are getting hit as well. So I, I think it's, uh, we're seeing a little bit of rotation here in the market.
Is this a sea change moment then, Rob, or is that a little bit of noise for the day that's going to start to kind of wade as we get further away from last night?
I, yeah, I'm not sure it's a sea change because I think for us we're still constructive on this space as we look out over the next couple of years. I think the question is, are we a little too overdone at the moment, maybe, maybe a little too overheated at the moment? Because as you pointed out just a minute ago, uh, really attention is going to start to turn to the jobs report and the Fed and what is the Fed doing and how is, how does that really help the rest of the economy beyond just technology and artificial intelligence.
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This post was written by Melanie Riehl