Why the Nvidia earnings isn’t doing as much as it should for US stocks

The stock market has been a rollercoaster. Traders and investors might still be scratching their heads, trying to make sense of it all. Markets always get a bit funky in the summer—thin trading desks, people on vacation, the usual stuff.

This year is no different. Just a few weeks ago, everyone was losing their minds over the yen carry trade. Remember that? Probably not. It came and went so fast that no one even remembers why they were worried. 

And then there’s this constant chatter about a looming U.S. economic slowdown, with bond and currency markets blowing things way out of proportion.

But this week, all eyes were on Nvidia. The hype was unreal. Sure, Nvidia is a big deal—one of the biggest companies out there. But the anticipation for their earnings report? It was next-level, even for a company like Nvidia. 

It’s not every day a company’s earnings are compared to critical economic data like inflation or job reports. But the focus was also on how much investors were expecting.

Overblown expectations and market reactions

Nvidia did its thing and posted some impressive numbers. Revenue more than doubled in three months, hitting $30 billion. And for the next quarter? They’re expecting to rake in $32.5 billion. Serious cash, am I right?

But after all that, Nvidia’s stock actually dropped 6% in after-hours trading. Why? Because investors were hoping for a bit more. When that didn’t happen, the stock took a hit. Shows you just how high the expectations were.

JPMorgan analyst Harlan Sur pointed out that even small delays in the production of Nvidia’s next-gen chip, Blackwell, won’t change the fact that cloud providers are still hungry for AI power. 

In fact, Sur thinks the demand for these chips could outstrip supply all the way through 2025. If Nvidia can’t keep up, it could mean trouble.

But Ned Davis Research analysts believe that when market breadth—basically, how many stocks are moving up versus down—improves, it usually means there’s optimism about growth and profitability.

Nvidia didn’t do much for Bitcoin either, by the way. The crypto diva has tumbled by 10% on the daily chart. Odd, too, considering the report dropped merely days after the Federal Reserve basically told us they were cutting interest rates.