Nvidia shares fell on Wednesday after Google parent Alphabet reported its quarterly earnings.
The report contained mixed signals for AI chipmaker Nvidia, whose shares fell 3.8% to $117.96 after losing 0.8% on Tuesday.
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The company’s earnings report showed that the tech giant has been pouring money into cloud and artificial intelligence systems over the past quarter. In the three months ended June 30, the tech giant’s capital expenditures came in at a better-than-expected $13.2 billion, up more than 90% from a year ago.
This could be good news for Nvidia, which dominates the market for graphics processing units (GPUs) needed to power large-scale AI language models.
But Nvidia investors may find it hard to be taken by the report, as Alphabet tempered expectations by keeping its spending guidance for the rest of 2024 unchanged.
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The earnings report “should make good reading” for Nvidia, Ben Reitzes, head of technology research at data analytics and investment firm Melius, said in a research note.
“There will be no 20% upward revision. [capital expenditure] “While the quarter hasn’t been great, there certainly seems to be potential for outlook upside from here if management wants to see revenue growth from cloud and AI search,” he added.
Fellow chipmakers Advanced Micro Devices Inc. fell 1.8%, and Broadcom Inc. dropped 3.6%. Texas Instruments Inc. traded flat even though its strong quarterly results underscored its status as a potential haven for semiconductor stocks during times of geopolitical turmoil.
Nvidia has posted jaw-dropping profits this year, soaring 148% and briefly overtaking Microsoft last month to become the world’s most valuable company.
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The stock index is expected to rise 16% in 2024,
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It increased by 20%.
Email George Glover at george.glover@dowjones.com.
