Nasdaq 100 futures fell on Wednesday night after Nvidia, a major player in the artificial intelligence industry, reported strong quarterly results that did not meet investors’ high expectations. Despite exceeding expectations on both the top and bottom lines, Nvidia’s shares dropped about 7% in extended trading. This disappointment was attributed to the fact that the company’s beat was smaller than in previous quarters and its future guidance was not as strong as anticipated. Wall Street analysts noted that Nvidia is still a strong company experiencing revenue growth of 122%, but the bar was set too high for this earnings season.
Salesforce, a business software giant, saw its shares rise by 3.5% after beating fiscal second-quarter estimates and raising its profit outlook for the full year. Conversely, CrowdStrike, a cybersecurity company, saw its shares drop by 3.8% after lowering its full-year outlook following a global outage in July, despite posting strong earnings and revenue numbers. The mixed reactions from investors to these earnings reports contributed to a losing session on Wall Street, with the Nasdaq Composite dropping 1.12%, the S&P 500 falling 0.6%, and the Dow Jones Industrial Average sliding 0.39%.
Nvidia’s significance in the broader market has been highlighted by these recent events, as the semiconductor company now accounts for approximately 7% of the S&P 500. The company’s market cap surpassed $3 trillion this year, briefly making it the world’s most valuable public company. As corporate earnings season continues, other notable consumer names such as Dollar General, Ulta Beauty, Lululemon Athletica, Campbell Soup, and Best Buy are set to report in the coming days. Additionally, the July personal consumption expenditures price index is scheduled to be released on Friday, providing further insights into the state of the economy.
Overall, while Nvidia’s earnings results fell short of expectations, the company remains a strong player in the artificial intelligence industry with significant revenue growth. As other companies in various sectors report their earnings, investor reactions have been mixed, leading to fluctuations in the stock market. The ongoing corporate earnings season and economic data releases will continue to influence market trends in the coming days.
