Nvidia (NYSE:NVDA) shares are in fluctuation after its earnings release on Wednesday.
NVDA – Daily Chart
The price of NVDA jumped above the $150 level but has closed bearish on the day. The risk is to the downside of this company.
Nvidia said its revenue came in at just above $35bn over the three months, which was above the $33bn consensus, but not the blowout that was hoped for. The company’s CEO Jensen Huang said on Wednesday after earnings: “The age of AI is in full steam, propelling a global shift to NVIDIA computing. Demand for Hopper and anticipation for Blackwell – in full production – are incredible as foundation model makers scale pretraining, post-training and inference”.
Market analysts said ahead of the recent earnings update that a positive share price reaction would depend on management revenue guidance, with only an earnings beat and stretched outlook being a driver for further stock gains.
Analysts also wanted reassurance that the new Blackwell rollout was on track to help justify the recent share price recovery. One of the bottlenecks for Nvidia’s chip supply has been limited capacity for advanced production techniques at its manufacturing partner TSMC.
The revenue guidance for the fourth quarter from management was $37.5bn compared to a $37bn figure anticipated by analysts. Finance chief Colette Kress said Blackwell shipments are scheduled to begin during this quarter, but warned that supply constraints will likely linger well into next year.
“We will be shipping both Hopper and Blackwell systems in the fourth quarter of fiscal 2025 and beyond,” Kress said. “Both Hopper and Blackwell systems have certain supply constraints, and the demand for Blackwell is expected to exceed supply for several quarters in fiscal 2026.”
The latest results are possibly a heads-up for investors that Nvidia’s growth boom has reached a plateau. That will have some questioning the growth valuations for Nvidia.
Analyst Gene Munster said on X:
“The key for how NVDA will trade tomorrow is to better understand the CFO’s comment that both Hopper and Blackwell systems have certain supply constraints, and the demand for Blackwell is expected to exceed supply for several quarters in fiscal 2026.”
Munster expects NVDA to trade lower on Thursday as analysts consider the headwind of production constraints as the company currently trades at 55x earnings.
