Nvidia Stock Plummets 10% After Disappointing Earnings Report
Nvidia Stock Plummets 10% After Disappointing Earnings Report...
Nvidia shares tumbled 10% in premarket trading Thursday after the chipmaker reported weaker-than-expected quarterly earnings. The drop erased nearly $80 billion in market value as investors reacted to slowing data center sales and concerns about AI chip demand.
The Santa Clara-based company reported $22.1 billion in revenue for its fiscal fourth quarter, missing analyst estimates of $22.4 billion. CEO Jensen Huang acknowledged "near-term challenges" in the data center segment, which grew just 27% compared to 409% growth in the previous quarter.
Wall Street analysts quickly downgraded Nvidia stock, with at least five major firms cutting price targets. "The AI gold rush appears to be hitting its first speed bump," said Goldman Sachs analyst Toshiya Hari in a research note. The stock had gained 225% in 2025 on AI optimism.
The earnings miss comes as Nvidia faces increasing competition from AMD and in-house chips developed by major tech companies. Microsoft, Google and Amazon have all announced plans to reduce reliance on third-party AI processors in recent months.
Retail investors flooded social media with reactions to the plunge. On Reddit's WallStreetBets forum, discussions about Nvidia surged 300% overnight. Many traders cited concerns about whether AI spending can maintain its explosive growth trajectory.
Nvidia remains the third-most valuable U.S. company with a $1.7 trillion market cap, but Thursday's drop marks its worst single-day performance since September 2024. The stock was trading at $675 in premarket action, down from Wednesday's close of $750.
The chipmaker's performance often serves as a bellwether for the broader tech sector. Nasdaq futures fell 1.2% following Nvidia's report, with other AI-related stocks including AMD and Super Micro Computer also declining in premarket trading.
Analysts will closely watch Huang's comments during the 2pm PT earnings call for clues about Nvidia's roadmap. Key questions include updates on the upcoming Blackwell GPU architecture and potential impacts from U.S.-China trade restrictions.
Thursday's selloff puts Nvidia shares back to levels last seen in November 2025. The stock had been up 40% year-to-date before the earnings release, significantly outperforming the S&P 500's 6% gain.
Market technicians note the stock is now testing critical support at its 200-day moving average. A sustained break below this level could signal more pain ahead for shareholders who rode Nvidia's AI-fueled rally.
