The stock market saw a slight decline in US stock futures after Nvidia Corp. gave a revenue forecast that fell short of the highest analyst estimates. This has raised concerns about the sustainability of the artificial intelligence boom that has been driving the market.
Futures on the Nasdaq 100 Index were down 0.6% and contracts on the S&P 500 Index fell 0.3%, with semiconductor-related stocks dragging down key Asian equity benchmarks. Despite a recent recovery, the Nasdaq 100 is still below its record high as investors question whether the massive rally in AI stocks this year has outpaced the actual profits that the technology will deliver.
Nvidia’s shares dropped more than 8% in post-market trading, with concerns about production issues with its new Blackwell chips also impacting sentiment. However, analysts believe that this is just a short-term setback in the face of the company’s overall strength.
Investors were on high alert for negative surprises ahead of Nvidia’s report, leading to declines in US stocks the day before. However, the fact that futures bounced back from their lows suggests that there is still optimism about Nvidia’s outlook in the long term.
Nvidia management has stated that they expect the Blackwell chip to bring in “several billion dollars” of revenue in the fourth quarter, which has helped alleviate some concerns. Analysts believe that formal guidance for the January quarter will be needed to fully dispel any doubts.
While the market may be disappointed by Nvidia’s results, it’s important to remember that slower growth is expected due to the challenging comparisons from previous years. This could just be a temporary dip in the company’s performance as it continues to innovate and drive the AI industry forward.