Nvidia’s Guidance Triggers Market Selloff
Nvidia (NASDAQ: NVDA) may have beaten Wall Street expectations with its latest quarterly earnings, but its cautious outlook has spurred a sharp selloff in after-hours trading. The chipmaker reported adjusted earnings of $0.68 per share on revenue of $30.04 billion, exceeding estimates of $0.64 per share and $28.68 billion in revenue for the three months ending July 28. In addition, Nvidia announced a massive $50 billion stock buyback program.
Despite these strong results, Nvidia’s stock dropped nearly 7% in after-hours trading, wiping out $200 billion in market value. The selloff came after the company issued revenue guidance of around $32.5 billion for the current quarter, which fell short of some analysts’ expectations. Additionally, Nvidia’s forecasted gross margin also disappointed, indicating a potential slowdown in growth compared to previous quarters.
Adding to investor concerns, Nvidia acknowledged challenges with its upcoming Blackwell line of advanced AI chips, although the company still plans to launch them by the fourth quarter. Nvidia’s meteoric rise has been fueled by skyrocketing demand for its AI chips, propelling its market capitalization above $3 trillion earlier this year. However, with shares rallying more than 150% year-to-date due to the AI boom, this significant dip could represent a buying opportunity for investors still bullish on the company.
Futures Mixed as Nvidia’s Results Weigh on Tech Sector
U.S. stock futures showed mixed performance on Thursday, as disappointing guidance from Nvidia weighed on the tech-heavy Nasdaq. By 04:05 ET (08:05 GMT), Dow futures were up 155 points, or 0.4%, while S&P 500 futures remained flat, and Nasdaq 100 futures fell by 30 points, or 0.2%.
Following Nvidia’s after-hours drop, investor focus is shifting back to the strength of the U.S. economy and the Federal Reserve’s potential policy responses. Key economic data, including weekly initial jobless claims, pending home sales, and revised second-quarter GDP figures, are due later today. Additionally, the market is eagerly awaiting the July Personal Consumption Expenditures (PCE) price index, set to be released on Friday.
Meanwhile, investors will also digest earnings from major consumer brands like Dollar General (NYSE: DG), Ulta Beauty (NASDAQ: ULTA), Lululemon Athletica (NASDAQ: LULU), and Best Buy (NYSE: BBY). Salesforce (NYSE: CRM) and CrowdStrike (NASDAQ: CRWD) are also in focus following their earnings reports after the close on Wednesday.
Apple Bets on AI to Boost iPhone Sales
Apple (NASDAQ: AAPL) appears to be ramping up for a significant boost in iPhone sales, driven by new AI capabilities. According to reports, Apple has ordered components for 88 to 90 million units of its flagship device, a substantial increase from the 80 million iPhones ordered last year. This move aligns with analyst forecasts that artificial intelligence will drive a new growth cycle for iPhone sales, which have been on a declining trend over the past year.
The tech giant is expected to unveil the new iPhone 16 in early September, which will feature a range of AI-driven enhancements. Analysts are optimistic that this innovation will reinvigorate sales, particularly as Apple looks to expand its footprint in the AI space.
Kamala Harris Set for CNN Interview
Vice President Kamala Harris and her running mate Tim Walz will sit for a CNN interview later today, marking Harris’s first major media appearance since becoming the Democratic presidential candidate in July. This interview offers Harris a chance to elaborate on her policy platform, which includes a proposed middle-class tax cut and a robust foreign policy stance.
Harris and Republican candidate Donald Trump are also set to face off in their first presidential debate next month, providing a critical opportunity for both candidates to present their visions to voters ahead of the November 5 election.
Crude Oil Prices Steady Amid Supply Concerns
Crude oil prices stabilized on Thursday following two days of losses, as traders assessed the impact of ongoing supply disruptions. By 04:05 ET, U.S. crude futures (WTI) were flat at $74.52 a barrel, while Brent futures edged down 0.1% to $77.52 a barrel.
Concerns over slowing demand in the U.S. and China, along with recent production disruptions in Libya, have kept traders cautious. Additionally, geopolitical tensions remain heightened after Ukraine targeted two oil storage facilities in Russia, further clouding the supply outlook. Meanwhile, a smaller-than-expected draw in U.S. oil inventories has raised concerns about cooling demand as the summer travel season winds down.
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