6.9 C
New York
Tuesday, February 4, 2025

Nvidia’s Tumble After Q2 Earnings: A Déjà Vu Moment for Tech Investors?

All copyrighted images used with permission of the respective Owners.

Apple’s Post-WWDC Rally Mirrors Nvidia’s Strong Quarter, Analyst Says

Wedbush analyst Dan Ives sees a parallel between the recent performance of Apple Inc.’s AAPL stock following WWDC 2024 and Nvidia Corp.’s NVDA strong second-quarter earnings. Despite initial negativity post-WWDC, Apple stock has rebounded, mirroring the positive sentiment around Nvidia’s strong performance, as Ives highlighted on social media platform X.

Key Takeaways

  • Apple’s stock has rebounded: Despite initial pessimism following WWDC, Apple stock has risen from around $190 to $226.
  • Nvidia’s strong quarter: Nvidia exceeded earnings and revenue expectations, driven by robust data center revenue.
  • Nvidia’s stock performance: Despite the strong quarter, Nvidia’s stock price has dipped slightly. The dip is attributed to a slight contraction in gross margin from the previous quarter.
  • Ives’ focus on fundamentals: Ives emphasizes the importance of demand, guidance, and growth as key metrics for evaluating a company’s performance.
  • Nvidia’s Blackwell GPU: The upcoming release of the Blackwell GPU is set to boost Nvidia’s production and has generated "incredible" customer anticipation.

Apple’s Post-WWDC Rebound: Shifting Sentiment

Following WWDC 2024, initial market sentiment towards Apple was negative, with analysts expressing concerns about the company’s future growth prospects. "Bears were all out at $190," Ives tweeted, referring to the bearish sentiment that prevailed around Apple stock at that time. However, the stock has since rebounded significantly, reaching $226, a sign that investors are adjusting their outlook.

Nvidia’s Strong Q2: Data Center Boom and Blackwell GPU Hype

Nvidia’s second-quarter earnings report showcased a robust performance fueled by strong growth in the data center segment. This strong performance led to a positive market reaction, with the company exceeding revenue and earnings expectations. “Nvidia checked all 3 boxes tonite [sic] with a massive quarter,” Ives tweeted, highlighting the company’s success in meeting or exceeding his key metrics of demand, guidance, and growth.

However, despite the overall positive performance, Nvidia’s stock price dipped slightly, attributed to a minor contraction in gross margin from the previous quarter. This slight dip is not concerning to Ives, who remains optimistic about the company’s future prospects.

A significant factor in the positive outlook is the upcoming release of the Blackwell GPU. Nvidia has made modifications to the Blackwell GPU mask to increase production yields, a move expected to bolster the company’s manufacturing capabilities. The production ramp for Blackwell is set to begin in the fourth quarter and continue into fiscal year 2026, as confirmed by Nvidia’s CFO, Colette M. Kress. This upcoming release has generated "incredible" customer anticipation, according to Nvidia executives, further reinforcing positive sentiment surrounding the company.

Looking Ahead: Apple and Nvidia’s Future Prospects

Ives’ analysis suggests that both Apple and Nvidia are on strong trajectories, with their recent performance reflecting positive fundamentals. Despite some initial skepticism following WWDC, Apple is showing signs of a rebound, while Nvidia’s strong earnings and upcoming Blackwell GPU release are generating excitement in the market. This positive outlook suggests that both companies are well-positioned for continued success in the future, particularly as the tech sector continues to experience rapid evolution driven by AI advancements and increasing demand for computing power.

"We always focus on demand, guidance, and growth," Ives stated, emphasizing the need to look beyond short-term price fluctuations and focus on the underlying fundamentals that drive long-term value.

The parallel between Apple’s post-WWDC rally and Nvidia’s strong earnings performance serves as a reminder that market sentiment can shift quickly. Investors who are able to correctly identify and assess the fundamentals behind these shifts will be well-positioned to capitalize on opportunities in the dynamic tech sector.

Article Reference

Lisa Morgan
Lisa Morgan
Lisa Morgan covers the latest developments in technology, from groundbreaking innovations to industry trends.

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

Twin Peaks IPO: Is a Restaurant Rush to the Stock Market Brewing?

The restaurant industry is watching closely as Twin Peaks, a sports bar chain, makes its debut on the Nasdaq, marking the first restaurant IPO...

China’s DeepSeek AI: Hype or Revolution?

DeepSeek's AI Model: A $5.6 Million Challenger to OpenAI's Dominance?The artificial intelligence landscape is experiencing a seismic shift. Chinese AI firm DeepSeek has unveiled...

Comcast Q4 2024 Earnings: Did the Streaming Wars Impact the Bottom Line?

Comcast's Q4 Earnings: Broadband Slump, Peacock's Rise, and the Looming Cable Network SpinoffComcast, a media and technology conglomerate, is set to release its fourth-quarter...