NVIDIA Corporation’s (NASDAQ: NVDA) shares fell 4.71% in premarket trading on Thursday, trading at $119.69, after the company’s quarterly forecast disappointed investors despite reporting strong earnings.
The AI chipmaker reported second-quarter earnings of $0.61 per share, surpassing the average analyst estimate of $0.64 per share. Revenue for the quarter came in at $13.51 billion, slightly above the expected $13.48 billion.
However, NVIDIA’s guidance for the current quarter fell short of expectations. The company expects revenue of $16 billion, while analysts had projected $16.33 billion. This muted outlook overshadowed the company’s solid performance in the reported quarter.
The stock’s decline reflects investor concerns about the sustainability of NVIDIA’s growth momentum in the face of macroeconomic challenges and potential saturation in the AI market. The company has been a key beneficiary of the recent AI boom, with its chips powering many of the popular AI models and services.
Despite the premarket drop, NVIDIA’s shares have still gained over 50% this year, outperforming the broader market. The stock’s performance has been a significant contributor to the recent rally in technology stocks.
As NVIDIA navigates the evolving AI landscape, investors will closely monitor the company’s ability to maintain its leadership position and deliver consistent growth in the coming quarters.