Nvidia (NVDA) puzzled technology investors on Thursday. Shares closed down by 5.5% after posting strong quarterly results. It also issued a strong outlook.
Nvidia is expecting revenue to top $78 billion in the first quarter (+/- 2.0%). Sentiment worsened when investors worried about the firm’s prospects in Asia. Nvidia does not expect to record any sales in China.
The weak trading in NVDA stock sent Broadcom (AVGO), Micron (MU), AMD (AMD), Intel (INTC), and Amazon (AMZN) lower. Its fellow trillion-dollar or higher market cap peers also dropped. Tesla (TSLA), whose P/E ratio is nearly 380 times, continued to trend lower. Shares peaked near $500 in December but closed at $408.58.
Investors who bought NVDA stock ahead of the earnings report are likely taking profits. The “sell on the news” pressure is typical for the most actively traded stocks.
Risks
Fear might spread among the customers of the AI buildout. Alphabet (GOOG) is spending up to $185 billion in 2026. This capital expenditure will fund its AI investment. However, Google search, YouTube, and Google’s cloud business cannot risk a deceleration in sales growth.
Tesla plans to spend over $20 billion in capex.
Amazon will spend around $200 billion this year, higher than investors expected. That sent AMZN stock from around $250 to a low of sub-$200. Amazon stock closed at $207.92 on Thursday.
