Did Nvidia shares peak in June? Who knows, but the sell-off following its latest results shows an awful lot of good news is priced in.
The stock had enjoyed what Interactive Brokers’ Steve Sosnick described as a “trillion-dollar turnaround” prior to earnings, with “reinflated expectations” suggesting the earnings “whisper number” was well above Wall Street estimates.
So it proved. Revenues were up 122 per cent on a year ago and topped analyst expectations. Guidance also exceeded official expectations, but what Bank of America (BofA) described as “good, not great” wasn’t enough for investors used to outlandishly large earnings beats.
BofA still believes in Nvidia, saying it offers “unique growth” at a “very reasonable valuation”. Most analysts agree, rating the stock a buy.
Trump tariffs: What ‘dark and damaging scenarios’ could economies face in Ireland and worldwide?
Is Ireland really suffering a tourism collapse?
Microsoft president Brad Smith: ‘Our support for Ireland is steadfast’
Tariff reaction day brings news of strong tax revenues, a warning on jobs and talk of pivoting to new markets
Still, Nvidia (and the wider technology sector) have lagged since June. If posting huge growth numbers isn’t enough for increasingly demanding investors, it suggests the market leadership baton may need to be passed to a new group of companies.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
