The biggest challenge for Nvidia stock, in one chart

Published On Aug 29, 2024, 10:21 AM

Nvidia's recent earnings report revealed a significant growth drop, with year-over-year revenue growth slowing to 122%, much lower than previous quarters. This slowdown has raised concerns among analysts and investors about future revenue prospects, particularly as Nvidia relies heavily on sales to major tech companies that may reduce spending. Despite a significant increase in overall revenue and continued demand for new products, like the upcoming Blackwell chip, analysts believe the company's growth expectations may be overly optimistic given the current economic conditions. Nvidia's stock has responded negatively following the report, reflecting these concerns.

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Negative

Nvidia's overwhelmingly strong previous performance was heavily driven by the AI growth boom, but current estimates show signs of unrealistic optimism given the decline in growth rates. This poses a potential risk for future earnings as reliance on major tech companies' spending might see a cutback.

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