Nvidia Earnings Beat Consensus, Stock Pulls Back on Outlook

Asian semiconductor stocks felt the shockwaves of Nvidia's recent earnings announcement, which fell short of some investors' lofty expectations, despite beating on top and bottom lines. After the release of earnings, NVDA ended extended hours 2.53% in the red, triggering a domino effect across the industry in Asia this morning.

An Nvidia bull, SoftBank Group, felt the impact of Nvidia's performance, with their stock (TYO: 9984) ending today's Tokyo session down 1.11% Taiwan Semiconductor Manufacturing Corp. (TSMC), which holds a significant position in the global chip-making sector, also saw its shares take a downward dip, down 1.46%, with Foxconn seeing a more significant 4.26% decline.

While Nvidia's recent earnings reveal a revenue surge of 94% climbing to an impressive $35.08 billion, a beat on the $33.11 billion expected, the company's forecast of $37.5 billion indicates a slower growth trajectory compared to previous quarters. The bar had been set so high, that any hint of a slowdown was likely to raise a little apprehension in the stock.

The company also beat on EPS, with the actual of $0.81 a strong beat on the $0.75 expected by markets. The rate of growth has been faster than that of previous quarter-on-quarter comparisons, and with segments such as data center beating all records, coming in at $30.8B, up 17% from Q2 and up 112% from a year ago, there is certainly still a lot to keep the bulls happy.

Blackwell demand seems set to outstrip supply over the next financial year, giving Nvidia a clear line on numbers, and also proofing revenue to a degree in periods to come.

The semiconductor industry is integral to powering contemporary technologies that span from everyday smartphones to advanced high-performance computing systems. It has attracted sizable investments from tech behemoths such as Microsoft and Amazon, reflecting its pivotal role in the tech ecosystem.

With Nvidia growing into the most valuable public company, there is always going to be some ripple down impact on important data releases.The reliance of countries on a limited number of tech giants like Nvidia has become a topic for consideration. It raises concerns about the need to diversify economic dependencies to maintain resilience in the face of geopolitical tensions or technological disruptions.