Nvidia shares slipped after last night’s US close, despite reporting second-quarter results that topped Wall Street’s expectations. The company beat consensus estimates on both earnings and revenues, and forward guidance was upbeat, even if it came in a tad short of the most optimistic forecasts. But disappointment centred on its data centre sales, which fell short of forecasts for the second consecutive quarter.
This miss weighed on sentiment, given Nvidia’s role as a key driver of the AI boom. The stock fell around 3% in after-hours trade, although it made back some of these losses ahead of today’s open. Overall, the disappointment was relatively contained, given that Nvidia accounts for around 8% of the S&P 500 by market capitalisation.
While other chip manufacturers also sold off (with AMD, Taiwan Semiconductor, Super Micro Computer and Broadcom all slipping around 1% in sympathy), the broader market was unaffected. So much so that the S&P 500 hit a fresh all-time intra-day high overnight, while the NASDAQ remains within sight of its own record high. This suggests that investors will need a far bigger catalyst than last night’s numbers for them to consider cutting their exposure to US equities.
Chart-wise, Nvidia continues to run into resistance around $180-$184. The chart also shows that the daily MACD is pulling back from overbought conditions in July. This could indicate that Nvidia will need to pull back further to rebase before it can head higher.
Source: TN Trader
Alternatively, it could just as easily consolidate around current levels which would help the MACD decline to more neutral levels. Of course, another option is that Nvidia’s rally stalls out, investors decide to book profits, and a correction develops. All options are on the table currently.
