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The chipmaking giant Nvidia (NASDAQ: NVDA), one of the most impressive blue-chip stocks in the 2024 market and a pivotal player in the artificial intelligence (AI) boom, experienced a somewhat unexpected share price drop in the extended session between November 20 and November 21. The crash – which amounts to 3.41% at press time – came as a surprise as it followed an otherwise strong Q3 earnings report published after the closing bell on Wednesday. Specifically, Nvidia announced an earnings-per-share (EPS) of $0.81 – better than the expected $0.75 – and a revenue of $35.08 billion – approximately $5 billion higher than in the preceding quarter and above the expected $33.16 billion. Though the fall may appear surprising given the provided figures, it follows something of a trend among big tech companies.  Indeed, as seen about a month earlier with Advanced Micro Devices (NASDAQ: AMD), investors appear ever keener on ever greater margins and growth and tend to react negatively even to otherwise strong performance. Why Nvidia stock’s post-earnings decline isn’t surprising NVDA share price decline – a decline that saw the stock move from its latest closing price of $145.89 to its pre-market price of $140.92 – to its otherwise strong performance in the last two years. NVDA stock 1-day price chart with November 21 pre-market. Source: Google Over the years, there has been much discussion about whether the AI boom is, in fact, an AI bubble. Nvidia has been seen as a leader in both scenarios, making it a natural gauge of the sector’s health. The uncertainty is further bolstered by the fact that the semiconductor giant’s revenue growth – though itself massive – has not kept pace with the company’s valuation.  For example, in its report published on January 31, 2023, Nvidia revealed a revenue of approximately…

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Filed under: News - @ November 21, 2024 11:28 am