US stock futures edged lower following Nvidia Corp.’s revenue forecast, which missed even the most optimistic analyst predictions, raising concerns about the long-term viability of the artificial intelligence boom. As of 12:34 p.m. in Hong Kong on Thursday, futures for the Nasdaq 100 Index declined by 0.6%, while those for the S&P 500 Index fell by 0.3%, both recovering from earlier declines. Semiconductor stocks, including Nvidia’s, contributed to a drop in a major Asian equity index.
Despite a recent rebound, the Nasdaq 100 remains below its all-time high, as investors question whether the remarkable rally in AI stocks this year is outpacing the actual financial returns of the technology. Additionally, anticipation of interest rate cuts has led to a shift in investments from tech stocks to other underperforming sectors.
Nvidia’s shares plummeted over 8% in after-hours trading following the company’s announcement of production issues with its new Blackwell chips, further impacting market sentiment.
Adam Crisafulli of Vital Knowledge suggested that while Nvidia’s latest results may have disappointed, the decline appears to be temporary. He attributed the slower growth to challenging comparisons and noted that the underlying strength of the market remains robust.
The downturn in US stocks on Wednesday, in advance of Nvidia’s report, indicated that investors were bracing for potential negative news. The fact that futures have recovered from their lows suggests that further declines may be limited, supported by ongoing optimism about Nvidia’s prospects.
TD Cowen analyst Matthew Ramsay highlighted that Nvidia’s projection of “several billion dollars” in revenue from the Blackwell chip in the fourth quarter is a positive sign and should mitigate some of the more pessimistic forecasts. However, he added that formal guidance for the January quarter is needed to fully resolve the uncertainty.
