Nvidia shares swung sharply after Wednesday’s U.S. after-hours session, initially falling after the company released its quarterly results before rebounding later in the session. The chipmaker reported second-quarter results that easily beat broad market expectations and also raised its guidance for the third quarter, giving fresh support to the AI investment theme that has helped drive the stock.
Even so, the market’s first reaction was muted. After a prolonged rally in technology stocks, the earnings report at first did not appear strong enough to excite investors. Sentiment shifted during Nvidia’s earnings call, when CEO Jensen Huang and other executives said the company expects revenue to grow 70% in fiscal 2028 and expanded on their earlier view that AI has reached an inflection point. Nvidia shares then rose by nearly 5% at one stage.
Analysts said the stock’s volatility was largely within market expectations. In their view, Nvidia’s challenge is no longer simply delivering good results, but producing results even stronger than what investors already define as outstanding. Under those conditions, beating Wall Street estimates is close to the minimum requirement rather than a decisive positive surprise.
Nvidia (NVDA.O) put investors through a sharp after-hours swing on Wednesday, with the stock falling immediately after its quarterly earnings release before rebounding strongly later in the session.
The company reported second-quarter results that easily beat broad market expectations and raised its forecast for the third quarter. Investors positive on the company took that as another supportive signal for the AI investment theme.
Still, after an extended run higher in technology stocks, the results at first did not seem enough to energize the market. Sentiment improved as the earnings call progressed.
Management comments lifted sentiment
During the call, Nvidia CEO Jensen Huang and other executives said the company expects revenue to grow 70% in fiscal 2028. They also expanded on their earlier view that AI has reached an inflection point. Nvidia shares then rose by nearly 5% at one stage.
Analysts say a simple beat is no longer enough
Analysts said: "For now, Nvidia’s share-price volatility remains within market expectations. The company’s challenge is no longer delivering good results, but delivering results better than what investors already consider ‘excellent.’ In that situation, beating Wall Street expectations is almost just the price of admission."
The report cited Jin10 as the source of the analyst comment.
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