Chipmaker Nvidia had more than £100billion wiped off its value after its latest set of record results failed to satisfy the sky-high expectations of investors.
The second-quarter figures, released on Wednesday night, showed profits surging 168 per cent to £12.6billion and sales climbing 122 per cent to £22.8billion.
It expects revenue of £24.6billion for the third quarter, more than Wall Street had pencilled in.
AI winner: Hotly-anticipated second quarter figures showed Nvidia’s profits surging 168% to £12.6bn and sales climbing 122% to £22.8bn
But shares slipped by as much as 6.3 per cent in New York last night, knocking nearly £120bn off the value of the £2.3trillion company.
Nvidia, which designs and supplies graphics processing units that are key to building artificial intelligence (AI) systems, has become a bellwether for the AI boom that has powered markets ahead, and its results have become as closely watched as major economic figures or central bank updates.
Wednesday’s results were ahead of the average expectations of Wall Street analysts. Chief executive Jensen Huang said: ‘Nvidia achieved record revenues as global data centres are in full throttle to modernise the entire computing stack with accelerated computing and generative AI.’
But investors may have become used to the company smashing even further past forecasts.
‘This was just one of those situations where expectations were so high,’ said JJ Kinahan, chief executive of trading platform IG North America.
‘I don’t know that they could have had a good enough number for people to be happy,’ Dan Coatsworth, analyst at AJ Bell, added.
‘Investors want more and more and more when it comes to Nvidia.
‘It looks like investors might not have taken the average of analyst forecasts to be the benchmark for Nvidia’s performance, instead they’ve taken the highest end of the estimate range to be the hurdle to clear.’
However, the share price fall was not enough to trigger a wider sell-off, with New York stock indices, including the tech-heavy Nasdaq, climbing yesterday.
Fellow big tech stocks such as Facebook-owner Meta, Amazon, and Apple posted gains. Nvidia has enjoyed meteoric growth, with shares more than doubling in value in the past year alone.
It has been at the centre of the AI boom, providing products for the likes of Google, Microsoft and Meta, which have ploughed billions of pounds into the tech.
In February, it became the fastest company ever to go from a $1trillion to a $2trillion stock market valuation.
Today, with a valuation of more than $3trillion, it is firmly ensconced within the elite band of US tech stocks.
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