icon
icon
icon
icon
Upgrade
Upgrade

News /

Articles /

Nvidia's Announcements: Why Investors Are Greeting Them with a Shrug

Theodore QuinnTuesday, Jan 7, 2025 11:38 am ET
3min read


Nvidia's recent announcements, including its earnings report and CES 2025 keynote, have led to a mixed investor response. While the company reported strong earnings and unveiled new AI technologies, investors have been more cautious than enthusiastic. This article explores the specific factors that have led investors to respond with a shrug rather than excitement.



Nvidia's earnings report and CES 2025 keynote were filled with promising news. The company reported a 122% year-over-year increase in revenue, driven by strong demand for AI infrastructure. Additionally, Nvidia's data center revenue hit a record $26.3 billion, accounting for 88% of total sales. The company also announced the launch of its RTX Blackwell family of GPUs, which use the company's next-generation AI chip, Blackwell.

Despite these positive developments, investors have been more subdued in their response. Several factors may contribute to this indifference:

1. Gross Margin Concerns: Nvidia expects its gross margins to tick down to the "low 70s" early in the fiscal year due to the production ramp of Blackwell chips. This has raised concerns among investors, as it indicates potential short-term pressure on profitability.
2. Modest Guidance: While Nvidia's sales guidance for the current quarter was above views, it was only modestly so. Investors may have been expecting a more bullish outlook, given the company's strong performance and the growing demand for AI technologies.
3. Blackwell Chip Delays: Rumors about potential delays in the launch of Nvidia's Blackwell chips had contributed to worries leading into the earnings report. Although executives reassured investors that the company still expects to begin earning revenue from Blackwell in this fiscal year, the uncertainty has dampened enthusiasm.
4. AI Hype Cycle Concerns: As AI technologies become more prevalent, investors are starting to question the sustainability of the AI hype cycle and the potential impact on tech giants' bottom lines. This uncertainty has contributed to a more cautious investor response to Nvidia's announcements.

NVDA Gross Profit Margin


Nvidia's announcements have sparked a range of reactions from analysts and investors. While some analysts, such as William Stein and Ben Reitzes, have maintained their buy ratings on Nvidia stock, others have expressed caution. Morgan Stanley analysts warned that supply constraints could limit the near-term outlook for Nvidia, adding that "we think the bigger upward revisions happen later in the year."

In conclusion, Nvidia's recent announcements have led to a mixed investor response, with investors greeting the news with a shrug rather than enthusiasm. While the company's strong earnings and AI technologies are promising, investors are increasingly focused on potential risks and uncertainties, such as gross margin concerns, modest guidance, Blackwell chip delays, and AI hype cycle concerns. As Nvidia continues to navigate these challenges, investors will be watching closely to see how the company addresses these issues and maintains its rapid growth rate.
Comments

Post
helena george
01/07

I have always believed in diversifying my portfolio, so I decided to invest €3000 in Bitcoin in early 2023. Watching the value go up and down was exciting and nerve-wracking. When Bitcoin peaked in 2024, my investment was close to €20,000! I withdrew a portion to secure my retirement and kept a smaller portion for future growth. It has been one of the most rewarding financial decisions I have ever made, although it has not been without its challenges. I am fortunate to have an experienced chartist trade manager overseeing my trades going forward on WhatsApp 👉 +1 (902)200-5666

1
scccc-
01/07
Nvidia's earnings were fire, but investors just shrugging? Market vibes can be weird sometimes. 😂
0
CrimsonBrit
01/07
Blackwell chip delays were a worry, but execs say they're still on track for this fiscal year. Fingers crossed 🤞.
0
Corpulos
01/07
RTX Blackwell sounds dope, but supply constraints could be a bummer. Keep an eye on that, y'all.
0
AdCommercial3174
01/07
Holding $NVDA, riding the AI wave, HODLing tight.
0
Miguel_Legacy
01/07
$NVDA guidance was meh, but AI demand is still strong. Holding my shares long-term, expecting big things post-hype cycle shakeout.
0
statisticalwizard
01/07
$NVDA guidance was meh, but it's all about timing the market. Patience is key here, IMO.
0
Hungry-Bee-8340
01/07
Nvidia's margins tick down, short-term pain for long-term gain?
0
WorkingCareful7935
01/07
Analysts like William Stein staying bullish. Trust your research and quality over hype, folks.
0
Elichotine
01/07
Morgan Stanley's cautious on supply constraints. Could impact near-term outlook. Not something to ignore, but also not a dealbreaker.
0
WorkingCareful7935
01/07
Nvidia's margins dipping to low 70s? Not a huge red flag if they're investing in next-gen AI. Long-term gains could be massive.
0
chrisbaseball7
01/07
Nvidia's margins dipping to low 70s? Not a huge red flag if they're investing in next-gen AI. Long-term play, folks.
0
Argothaught
01/07
Still holding $NVDA and $TSLA in my portfolio. Diversification is the move, even with tech giants.
0
VegetaIsSuperior
01/07
AI hype cycle concerns are real. Is everyone just chasing rainbows? Always DYOR, folks.
0
LabDaddy59
01/07
RTX Blackwell sounds dope, but delays could be a bummer. Keeping an eye on those supply constraints. 🚀
0
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
You Can Understand News Better with AI.
Whats the News impact on stock market?
Its impact is
fork
logo
AInvest
Aime Coplilot
Invest Smarter With AI Power.
Open App