Nvidia’s Rally Pauses as Forecasts Disappoint Investors

Shares of Nvidia (NVDA.O) fell over 6% on Thursday after the company’s third-quarter forecast failed to meet high market expectations. Despite the dip, investors remain hopeful about the ongoing AI boom that has driven the chipmaker’s stock up 137% this year.

Nvidia projected third-quarter revenue of $32.5 billion, slightly above analyst estimates of $31.8 billion, but below the highest market expectations of $37.9 billion. The forecast also included potential margin pressure, sparking concern among investors. However, the company reassured the market by announcing that production of its next-generation Blackwell chips will ramp up in the fourth quarter.

While Nvidia’s stock declined, other chipmakers saw mixed results. Broadcom (AVGO.O) and Advanced Micro Devices (AMD.O) both fell slightly, while Arm Holdings gained 5.3%.

Despite the sell-off, some analysts view this as a buying opportunity. Nancy Tengler, CEO of Laffer Tengler Investments, suggested that the dip is a chance to accumulate Nvidia stock, citing the company’s strong long-term AI prospects.

Nvidia’s recent $50 billion share buyback announcement and strong second-quarter earnings demonstrate its market dominance. However, concerns about rising regulatory scrutiny and delays in chip production have introduced some uncertainty.

As the AI landscape continues to evolve, Nvidia remains a central player, with many investors betting on its continued success.