POLAND – NOVEMBER 13, 2024: In this photo illustration, the NVIDIA company logo is shown on a smartphone screen. (Photo illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images)
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NVIDIA Shares fell in U.S. premarket trading on Thursday as the tech giant failed to impress investors with its third-quarter profit.
Shares of Nvidia fell 3.21% at around 5:03 a.m. ET after the chipmaker reported quarterly results on Wednesday that beat both revenue and profit expectations.
Revenue was US$35.08 billion, an increase of 94% year-on-year, exceeding LSEG analysts’ forecast of US$33.16 billion. Adjusted earnings per share were 81 cents, also higher than analysts expected.
Other chipmakers fell on reaction to Nvidia’s third-quarter results. shares Intel, Qualcomm and Micron Technology a loss of 1% or more in total value, and AMD down 0.6%.
Nvidia’s decline has also had a knock-on effect on European semiconductor companies. Major chip equipment supplier ASML fell 0.9%, while fellow Dutch chip company ASMI fell 0.5%. Chip manufacturer BE Semiconductor, STMicroelectronics and Infineon fell 0.8%, 0.7 and 0.6% respectively.
Share prices of some of Asia’s leading chip brands also fell. Shares of TSMC, which produces Nvidia’s high-performance graphics processing units, fell 1.5%. Contract electronics maker Foxconn fell 1.9%.
Why is Nvidia stock price falling?
Nvidia has largely cornered the market for high-performance chips that power some of the world’s most advanced artificial intelligence models, such as OpenAI’s ChatGPT.
Although sales nearly doubled year-on-year, Nvidia’s third-quarter performance slowed down from previous quarters. Nvidia previously reported growth of 122% in the second quarter of 2023, 262% in the first quarter, and 265% in the fourth quarter.
Derren Nathan, head of equity research at Hargreaves Lansdown, said in emailed comments on Wednesday that Nvidia’s share price decline “suggests that for some investors, even outperformance is not enough,” adding that he expects the stock to rise once markets open. will rebound.
“NVIDIA has delivered substantial returns to shareholders over the years, and it is currently difficult to find any significant holes in the investment case,” Nathan added.
Analysts are looking forward to the launch of Nvidia’s highly anticipated next-generation chip, Blackwell. During the company’s earnings call, CEO Jensen Huang said Demand for the wafer exceeds supply.
—CNBC’s Kif Leswing contributed to this report
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