Nvidia, on Wednesday, posted record Q4 revenue of $22 billion, boasting a 265% increase from the same quarter the prior year and earnings that blew past expectations. Yet, in the immediate aftermath of those earnings, the stock fell 3% in the after-hours market.
That dip didn’t last, it’s worth noting. And it’s less a commentary on Nvidia’s earnings and more about the extraordinarily high expectations investors have for the artificial intelligence market. As of 5:15 p.m. ET, Nvidia shares were up 8% in after-hours trading and had gained as much as 10% at one point.
The reaction to Nvidia’s earnings had a ripple effect. Shares of Super Micro Computing also soared nearly 8% in after-hours trading. Arm Holdings was up 5%. And AMD gained more than 3%.
The strong Nvidia beat—and the comments of the company about sustained demand for microprocessor chips—gave the market a collective sigh of relief. The trading desk at Goldman Sachs has called Nvidia the “most important stock on planet Earth.”
That, in some ways, makes Nvidia president Jensen Huang the new E.F. Hutton: When he speaks, people listen. The real turnaround in the after-market came after Huang said in an earnings release that, “Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries, and nations.” Also, as investors noted the data center segment of the business beat expectations and posted a 409% year-over-year increase, despite Colette Kress, the company’s CFO, saying, “data center sales declined significantly [emphasis ours] in the fourth quarter due to U.S. government licensing requirements.”
The post-market roller-coaster ride for Nvidia’s stock shows just how high expectations are for this company—and for AI.
For instance, Wall Street officially was expecting the outlook for the first fiscal quarter of 2025 to come in at $22 billion. Nvidia announced it was expecting that to be $24 billion—a solid beat. But buy-side traders were informally expecting guidance of $23 billion (or more), which lessened the impact and initially took a little wind out of the company’s sails.
