NVIDIA Earnings Fail to Lift Markets
Despite strong earnings, NVIDIA's results failed to ignite the broader market, signaling that exceptional results are now the baseline expectation for AI stocks. Geoffrey Dennis notes that earnings growth across the AI sector is very good, but warns markets are "pricing perfection" where any miss can trigger sharp corrections. Tesla speculation continues with predictions of $1,000/share if robotaxi scaling hits tens of thousands of units this summer.
Nvidia's fourth-quarter revenue surged 73% year-over-year to $68.13 billion, handily beating analysts' estimates of around $65.56 billion. The company's earnings per share also surpassed expectations at $1.62. This growth was overwhelmingly driven by its data center division, which accounted for a record $62.3 billion in sales. Despite the massive earnings beat, the stock faltered in the following days. The company's forecast for the next quarter projects revenues of approximately $78 billion, well ahead of Wall Street's expectations, yet it wasn't enough to spark a rally. This muted reaction underscores the immense pressure on AI stocks, where blowout earnings are now the minimum expectation. The sentiment around AI stocks has been cooling, with a recent survey showing a 12-percentage-point drop in bullishness among retail traders. Broader market concerns center on high valuations and the potential for an "AI bubble," causing sell-offs even when top players like Nvidia post record results. These fears have spilled into the software sector, with stocks like Salesforce and Workday falling amid concerns that AI-driven efficiencies could lead to widespread job cuts. Investors worry that a reduced workforce will shrink the market for business software, which is often sold on a per-seat basis. Meanwhile, Tesla's robotaxi fleet has grown to over 500 vehicles operating in Austin and the Bay Area, logging nearly 700,000 paid miles since June 2025. The company has begun offering some fully unsupervised rides without a safety monitor in Austin and plans to expand to seven new U.S. cities. However, the robotaxi rollout faces challenges. A recent analysis in Austin found that Tesla's service, while cheaper, had longer wait times and took less optimal routes than Uber. Furthermore, reports indicate Tesla has yet to secure commercial permits in major markets and is engaged in legal disputes with regulators. Wall Street analysts remain divided on Tesla, with a consensus "Hold" rating on the stock. While some are bullish on the long-term potential of autonomy, others point to significant execution risks and a valuation that already prices in transformational success.
