Nvidia Beats – Stock Falls
This was arguably the most anticipated earnings release of the entire quarter. Everyone had their eyes on Nvidia, and the company did not disappoint. Revenue, profit, guidance – all above expectations. AI growth stronger than ever. And yet, the stock dipped. That reaction seems strange on the surface, but it makes sense once you zoom in.
The reality is that investors were already expecting a beat. With every major tech company – Meta, Google, Microsoft, Amazon – throwing billions into CapEx, the spending had to land somewhere. Nvidia was the obvious beneficiary. A strong quarter wasn’t just likely, it was practically guaranteed. Which is why, instead of soaring, the stock pulled back. Call it profit-taking, call it over-enthusiasm cooling down – but it shows how high the bar has gotten over the last months.
There’s another point too: valuation. Nvidia is pricy. At a forward P/E of over 40, the stock is priced for near-perfection. That multiple reflects its massive moat and critical role in the AI revolution, but it also means the market demands more than just good results. And when a stock no longer rises on great news, that’s usually a warning sign.
What really spooked some people, though, was management’s cautious tone. Nvidia, like others this earnings season, warned of potential headwinds in the next Quarters. I mean you can blame them, in a time where the president decides policies on the spot according to his mood. And that matters, because many analysts had been operating under the assumption that booming AI demand and record CapEx spending would offset any macro drag. Nvidia casting doubt on that narrative introduces a layer of uncertainty.
Does that mean Nvidia’s story is broken? Absolutely not. This is still one of the best companies in the world, led by Jensen Huang, arguably the most visionary CEO in tech. The company is building the infrastructure for an AI age. That doesn’t change with one earnings call. But it does mean that for now, the stock is priced so aggressively that even anything deviating from absolute perfection feels underwhelming.
For me, this is a “wait and watch” moment. I’d love to own Nvidia, but not at these levels. If the stock comes back down – whether because of cautious guidance, tariffs, or simply the weight of its own valuation – I’ll be ready to reconsider. Until then, I’m on the sidelines.
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