Thursday's trading session unfolded with semiconductor stocks surging despite a drop in Nvidia Corp.'s (NASDAQ:NVDA) shares.
Nvidia's earnings were seen as a critical juncture for the broader stock market in August, with the potential to either boost or reverse the recent rally. However, events did not play out as many had expected.
Nvidia Shares Fall On Unimpressive Guidance
Nvidia's shares failed to rebound after a negative reaction in Wednesday's post-market hours.
The Santa Clara, California-based company reported quarterly revenue of $30 billion, beating estimates of $28.86 billion, reflecting a 15% increase from the previous quarter and an impressive 122% year-over-year growth.
Net income reached $16.6 billion, up 12% from the prior quarter and a significant 168% increase compared to the same quarter last year. Earnings per share came in at 68 cents, surpassing the expected 64 cents.
Despite surpassing Wall Street's revenue and earnings forecasts, Nvidia's outlook failed to meet investors' already lofty expectations for the coming quarters. The company projected this quarter's revenue at $32.5 billion, plus or minus 2%, slightly above the estimated $31.9 billion, but not enough to excite the market.
See Also: NVIDIA To Rally Over 31%? Here Are 10 Top Analyst Forecasts For Thursday
7 Semiconductor ETFs Rise
Investors likely viewed Nvidia's quarterly results as a standalone event, opting for caution as the company's guidance did not significantly exceed expectations.
Yet, they maintained a generally positive sentiment toward the broader market. Competitors of the AI giant experienced a marked rally, deviating from their usual trend of closely following Nvidia's performance.
"We believe Nvidia's comments on Data Center demand were constructive," Toshiya Hari, an analyst at Goldman Sachs, stated. The company's outlook for data center demand bodes well for other semiconductor firms involved in the AI infrastructure build-out.
Hari highlighted "ongoing tightness in High-Bandwidth Memory as a material positive for Buy-rated Micron Technology Inc. (NASDAQ:MU)."
Even exchange-traded funds (ETFs) with a significant Nvidia exposure witnessed positive performance during Thursday's trading session. Here are some notable movers:
- Strive U.S. Semiconductor ETF (NYSE:SHOC): up 0.7%, despite Nvidia comprising 30% of the fund.
- VanEck Semiconductor ETF (NYSE:SMH): up 0.8%.
- VanEck Fabless Semiconductor ETF (NYSE:SMHX): up 1.2%. This newly launched ETF focuses on companies that specialize in chip design and development while outsourcing production.
- Invesco PHLX Semiconductor ETF (NYSE:SOXQ): up 1.4%.
- First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL): up 1.6%.
- iShares Semiconductor ETF (NYSE:SOXX): up 1.7%.
- SPDR S&P Semiconductor ETF (NYSE:XSD): up 2.7%.
Thursday's Top-Performing Semiconductor Stocks
| Name | 1-Day % |
| Arm Holdings pic (NASDAQ:ARM) | 4.81% |
| Intel Corporation (NASDAQ:INTC) | 4.50% |
| Marvell Technology, Inc. (NASDAQ:MRVL) | 4.29% |
| ON Semiconductor Corporation (NASDAQ:ON) | 4.18% |
| Qorvo, Inc. (NASDAQ:QRVO) | 3.73% |
| Teradyne, Inc. (NASDAQ:TER) | 3.37% |
| Onto Innovation Inc. (NASDAQ:ONTO) | 3.06% |
| Microchip Technology Incorporated (NASDAQ:MCHP) | 2.98% |
| Analog Devices, Inc. (NASDAQ:ADI) | 2.82% |
| Skyworks Solutions, Inc. (NASDAQ:SWKS) | 2.80% |
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