Nvidia's forecast dampens AI enthusiasm in other tech stocks

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Nvidia's forecast dampens AI enthusiasm in other tech stocks

-Nvidia dragged technology heavyweights lower after the chip maker's earnings disappointed investors who had been hoping they would fuel fresh gains in Wall Street's most valuable companies, and sent stocks in Asia down on Thursday.Nvidia dropped almost 7% and lost $200 billion in stock market value after it forecast third-quarter gross margins that could miss market estimates and revenue that was largely in line.

Surging demand for its AI chips helped Nvidia crush consensus analyst estimates for several quarters, a trend that led investors to expect the company to exceed forecasts by higher and higher margins. The lackluster response to Nvidia's earnings report could help set the tone for market sentiment heading into what is historically a volatile time of the year. Thehas fallen in September by an average of 0.8% since World War Two, the worst performance of any month, according to CFRA data.

However, confidence in that rally has wavered in recent weeks following an earnings season that saw investors punish shares of tech companies whose results failed to justify rich valuations.) and other major players in the race to dominate emerging AI technology. Microsoft and Alphabet's stocks remain down since their reports last month.

Nvidia's stock dropped 2.1% in Wednesday's session, ahead of its report. It remains up about 150% so far in 2024, making it the biggest winner in Wall Street's AI rally.

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