Nvidia Q2 Results Leave ETF Investors Unexcited

Nvidia beat analyst estimates, but its Q3 guidance was only modestly upbeat.

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sumit
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Senior ETF Analyst
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Reviewed by: etf.com Staff
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Edited by: James Rubin

What was billed as the biggest event of the week for stock markets turned out to be a snooze fest. 

Nvidia shares were down just slightly on Thursday after reporting earnings that beat analyst estimates, but they fell short of the most bullish forecasts.

The AI powerhouse has a huge weighting in many exchange-traded funds, including a nearly 7% allocation in S&P 500 funds like the SPDR S&P 500 ETF Trust (SPY).

Granted, there was some volatility in Nvidia’s stock shortly after it reported earnings. The price briefly fell below $116 after hours on Wednesday, a decline of almost 8%. 

Some investors were disappointed that the company didn’t provide stronger guidance for the third quarter.

Third quarter revenues are expected to be $32.5 billion plus or minus 2%, said the company. That’s just modestly above the $31.9 billion that analysts were anticipating for the quarter ahead of the report.

However, it still represents growth versus the $30 billion in revenues the company generated in the second quarter. Not to mention, the company’s actual results have topped its guidance by $2 billion in each of the past five quarters.

XLK, SMH, SOXX Rise

Some analysts noted that Nvidia’s Q3 guidance would have likely been higher were it not for the delay of the company’s next generation Blackwell chips.

Nvidia now expects to ship several billion dollars of Blackwell revenue in the fourth quarter, slightly later than the third quarter ramp-up that the company had forecast three months ago.  

Nevertheless, Nvidia was adamant that demand for Blackwell was enormous and that the new chips would power strong growth for the company through next year.

As investors digested those comments, Nvidia stock rebounded to last trade 3% lower on the session.

Tech ETFs, like the Technology Select Sector SPDR Fund (XLK), and semiconductor ETFs like the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) were all trading up by 1% or more on the day.

etf.com

After all the hype, Nvidia’s earnings report didn't have quite the market impact that many had thought it would. 
 

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.