Dow, S&P 500, Nasdaq sink as Nvidia leaves investors wanting more

From Bloomberg:

Nvidia Corp., a leading manufacturer of artificial intelligence processors. (NVDA) failed to impress investors with its latest sales forecasts, signaling that concerns about an overheated AI economy will haunt the company.

Nvidia shares fell as much as 1.5% during a conference call with analysts, even though the chipmaker delivered a 73% increase in revenue in the fourth quarter and easily beat the average Wall Street forecast in the first quarter. The stock was up less than 1% in premarket trading Thursday.

This was a stark reminder of the skepticism currently surrounding Nvidia. Investors are seeking stronger assurances that rising AI sales will continue after explosive sales growth made the chipmaker the world’s most valuable company.

“By most measures, Nvidia delivered solid results,” analysts at JPMorgan Chase & Co. said in a note after the results. “Even so, the stock reaction shows investors continue to want more.”

CEO Jensen Huang pushed back on concerns during Wednesday’s call, arguing that customers were already making money from their newly acquired computing power. Therefore, he said, customers will continue to invest at high levels.

“You need computing capacity, and that translates directly into growth, which translates directly into revenues,” Huang said. “I’m sure their cash flow is increasing.”

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