Nvidia Slumps Nearly 5% In Premarket, Dragging Down Super Micro, Micron And Other Peers: What's Going On?

Author: Shanthi Rexaline | August 29, 2024 05:11am

Artificial intelligence stalwart Nvidia Corp. (NASDAQ:NVDA) reported Wednesday after the market close forecast-bearing results and also issued above-consensus guidance. A slight sequential decline in margin was the only sore spot. Notwithstanding the outperformance, the chipmaker could not satiate the Street.

What Happened: Nvidia reported fiscal year 2025 second-quarter non-GAAP earnings of 68 cents per share and revenue of $30.04 billion, outperforming the Street estimate of 64 cents and $28.68 billion. Non-GAAP gross margin slipped 3.2 points sequentially to 75.7%, with the company attributing the softness to inventory provisions for low-yielding Blackwell material and a higher mix of new products within the data center business.

The company guided to third-quarter revenue of $32.5 billion-plus or minus 2%, compared to the consensus of $31.69 billion, and maintained full-year non-GAAP gross margin guidance in the range of the mid-70%.

Nvidia also announced an incremental $50 billion stock buyback program.

Making sense of the stock weakness post earnings, The Future Fund LLC’s Gary Black said the variance of the guidance versus the consensus was the smallest in several quarters and way less than many investors were expecting.

Deepwater Asset Management’s Gene Munster suggested the sell-off was overdone and the stock will come back up in the coming week. The management did not clarify the Blackwell 200 delay but it could be pushed out by at least two months, the tech venture capitalist said.

In premarket trading on Thursday, Nvidia slipped 4.47% to $120, according to Benzinga Por data. The stock could trim the losses into the session as the sell-side talks it up. Nvidia’s weakness reverberated in the whole of the chip ecosystem with semiconductor, and chip-equipment makers as well as suppliers taking a hit.

See Also: Best Semiconductor Stocks

The Chip Movers:

• Advanced Micro Devices, Inc. (NASDAQ:AMD) fell 1.66% to $143.93.
• AI server maker Super Micro Computer, Inc. (NASDAQ:SMCI), which has taken a severe pounding in the previous two sessions on a short report, plunged 5.30% to $420.
• Nvidia’s supplier and foundry Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) slipped 1.79% to $166.17.
• Micron Technology, Inc. (NASDAQ:MU) lost 1.66% to $93.29.
• Broadcom Inc. (NASDAQ:AVGO) moved down 1.80% to $155.34.
• Marvell Technology, Inc. (NASDAQ:MRVL) retreated 1.01% to $67.75.
• Arm Holdings plc (NASDAQ:ARM) declined 1.68% to $123.21.

The iShares Semiconductor ETF (NASDAQ:SOXX), an exchange-traded fund that tracks the performance of the Philadelphia Semiconductor Index slipped 0.73% to $224.26.

Read Next:

• Nvidia CEO Jensen Huang Identifies $1 Trillion Opportunity Amid Generative AI Shift: ‘Data Centers Will Be All Accelerated Computing’

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Posted In: AMD ARM AVGO MRVL MU NVDA SMCI SOXX TSM