Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading in New York on August 23, 2024.
Angela Weiss | AFP | Getty Images
Nasdaq 100 futures fell Wednesday night after Nvidia, the artificial intelligence pioneer that’s risen more than 150% this year, reported strong quarterly results that failed to meet investors’ lofty expectations.
Nasdaq 100 futures fell 0.9% and S&P 500 futures dropped 0.5%, while Dow Jones Industrial Average futures were little changed.
Nvidia shares fell about 7% in after-hours trading after the AI chip maker beat expectations on revenue and profit in its second-quarter results and gave a brighter outlook for current-quarter revenue, but failed to impress traders who were hoping for a better-than-expected performance.
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“Death, taxes and NVDA’s better-than-expected earnings are three solid things to expect. The problem is that the size of this better-than-expected earnings is much smaller than in previous quarters. Future guidance has also been raised, but again, not by as much as in the last quarter,” wrote Ryan Detrick, chief market strategist at Carson Group.
“It’s still a great company with 122% revenue growth, but it looks like the bar was set a little too high this quarter,” Detrick added.
Shares of business software giant Salesforce rose 4% in after-hours trading after the company reported second-quarter sales and profits that beat expectations and raised its full-year profit outlook. Cybersecurity company CrowdStrike fell more than 2% after it cut its full-year outlook following the global outages in July, but still reported better-than-expected profits and sales.
Wall Street ended lower after Nvidia shares tumbled ahead of the company’s earnings report, weighing on major stock indexes. The tech-heavy Nasdaq Composite Index fell 1.12%, while the S&P 500 lost 0.6%. The Dow Jones Industrial Average lost about 159 points, or 0.39%, on the day.
The moves underscore Nvidia’s growing importance to the broader market: The semiconductor company, which this year saw its market capitalization exceed $3 trillion, briefly making it the world’s most valuable publicly traded company, and now accounts for about 7% of the S&P 500.
Earnings season continues on Thursday with notable consumer stocks including Dollar General, Ulta Beauty and Lululemon Athletica, along with Campbell Soup and Best Buy.
The personal consumption expenditures price index for July is due to be released on Friday.
