Nvidia’s latest earnings report confirmed one thing: AI demand is still booming. Yet, surprisingly, Nvidia stock didn’t join the celebration.
On Thursday, the broader market surged, with the S&P 500 hitting a new all-time high. Several AI-related stocks saw impressive gains, including chipmaker Micron (MU), industrial AI play GE Vernova (GEV), and Nvidia rival Broadcom (AVGO). Energy names tied to AI infrastructure, such as Vistra (VST) and Constellation Energy (CEG), also climbed. Big cloud players—Amazon (AMZN), Alphabet (GOOG), and Oracle (ORCL)—each rose more than 1%.
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In contrast, Nvidia (NVDA) shares slipped nearly 1% after the company reported earnings that beat Wall Street’s expectations.
Analysts suggest this reaction is less about Nvidia’s performance and more about investor sentiment. “To see the stock dip slightly after such strong results suggests that expectations have finally caught up with Nvidia’s growth potential,” explained Morgan Stanley’s Joseph Moore. Despite the muted stock move, Moore called it a “clean beat and raise” quarter, excluding headwinds from China.
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AI Demand Still Surging
Nvidia’s Q2 results clearly showed that AI tailwinds remain strong. The company guided for approximately $54 billion in revenue for Q3—a $7 billion jump from the previous quarter and a 15% increase, even without contributions from China. That’s notable, given that China previously made up about 20% of Nvidia’s data center business, according to Moore.
Broader enthusiasm for AI continues to power markets. Over the past three years, AI optimism has driven up the stocks and capital expenditures of tech giants like Microsoft (MSFT), Amazon, and Meta (META). However, concerns about the durability of the AI boom have surfaced recently. Last week, OpenAI CEO Sam Altman voiced doubts about the rally’s sustainability, and a study by MIT found that most companies have yet to see meaningful returns from their AI investments.
Still, Nvidia’s latest outlook signals that AI spending at the infrastructure level—particularly in data centers—is accelerating, even if investor expectations are now sky-high.
In short, Nvidia’s results reaffirmed the AI growth story. It’s just that the stock may have already priced in much of the good news.
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