Nvidia shares dip in premarket trade despite earnings beating estimates
Nvidia shares fell 4.5% in U.S. premarket trade on Thursday despite its fiscal second-quarter results beating estimates.
Nvidia shares dipped in U.S. premarket trade on Thursday, as the company's fiscal second-quarter gross margin dipped slightly, and its revenue beat was eclipsed by a backdrop of increasingly lofty expectations.
The company's stock was down 4.6% in premarket deals, but had pared losses to a drop of 3.6% at about 8:15 ET.
Nvidia reported July quarter revenue on Wednesday of more than $30 billion, up 122% year on year.
It was the fourth straight quarter of triple-digit revenue growth. But as Nvidia continues its rapid expansion, the annual comparisons are getting tougher.
Nvidia issued market-beating revenue guidance for its fiscal third quarter of $32.5 billion. That would imply an 80% year-on-year increase, but a slowdown from the June quarter.
Meanwhile, the company said that gross margins would be in the "mid-70% range" for the full year. Analysts were expecting a full-year margin of 76.4%, according to StreetAccount.
However, analysts said that Nvidia would have had to beat all expectations by a long way, in order to see a pop in the stock after the numbers.
The pullback in the stock on Thursday also comes after a meteoric rally, with Nvidia's shares rising more than 150% this year to date. The stock has picked up more than 750% since the start of 2023, as one of the biggest beneficiaries of the artificial intelligence boom. Large technology companies have been ramping up investment and buying Nvidia's graphics processing units to train large AI models.