Are Nvidia's Numbers Good Enough to Lift the Market?
Here's what could change the complexion of the market.
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The celebration of tariff relief and stronger consumer sentiment didn't last long. Stocks languished on Wednesday, with breadth running nearly three to one negative and the Russell 2000 IWM lagging with a loss of 1%. Magnificent Seven MAGS names declined 0.67%, and semiconductors SMH dropped 1% as they nervously awaited the earnings report from Nvidia NVDA.
The lack of energy isn't a major technical negative at this point, but there is now another gap on the index charts from Tuesday morning, which will be the key technical support. If that gap starts to fill, then the complexion of the market will change.
The big question now is whether earnings reports from Salesforce CRM and Nvidia NVDA can provide some lift for the broader market. These stocks have had nice runs off the April 7 lows, but the letters "AI" no longer hold the magic that they once did. These names also must perform and provide strong guidance if the stocks are going to keep running.
Salesforce results were slightly ahead on the top and bottom lines and it had a small increase in guidance. That is good enough initially to send the stock up about 4%, but is this beat strong enough for it to break through technical overhead at the 200-day simple moving average around $296?
HP Inc. HPQ is seeing a negative reaction to earnings, while Synopsys SNPS is up and Veeva Systems VEEV is the big winner so far tonight.
Nvidia NVDA is the Big Kahuna of the market and will impact a wide variety of other stocks in the market, especially in the chip sector. Nvidia earnings came in at $0.81 per share vs. $0.73 consensus, and revenues were $44.06 billion vs. $43.34 billion consensus. However, the more important news is that Nvidia sees Q2 revenues of $44.10 billion-$45.90 billion vs. $45.92 consensus. This outlook reflects a loss in revenue of approximately $8.0 billion due to the recent export control limitations imposed by the Trump administration.
That is not much of a beat, but the stock is up about 6% initially on the news. Expectations have been tempered due to the trade and tariff turmoil, but it is going to take some effort to generate stronger momentum.
This is not a blowout report for Nvdia, but it appears it's good enough for now. We will see on Thursday how much positive impact it has on the semiconductor sector and AI-related names.
Have a good evening. I'll see you Thursday.
At the time of publication, Rev Shark had no positions in any securities mentioned.
