28.05.25 - All eyes on Nvidia

Nvidia has just released its fiscal Q1 2025 earnings, reporting revenue of USD 44.1 billion, a 12% increase from the previous quarter. This figure is slightly above the anticipated USD 43.3 billion. However, the company reported EPS of USD 0.81, below the analysts expected of USD 0.93, potentially due to the USD 5.5 billion inventory write-down stemming from US export restrictions on its H20 chips to China

Markets: No big market reaction so far; Nvidia +2.5% in after hours trading, Nasdaq Futures 100 points higher reflecting this move, however, negative for the day.

My view: Seems the market puts the focus on the revenues and not earnings figures as there is a slight positive reaction.
I keep my cautious stance on the AI sector. While Nvidia's growth story remains impressive, the current valuation seems to reflect high expectations for sustained AI demand. The impact of geopolitical factors, such as the export restrictions to China, underscores the uncertainties facing the company. Investors should remain vigilant. The investors’ sentiment can shift quickly away from the AI euphoria and a sell-off in the most crowded stocks like Nvidia and the Magnificent 7 can lead to losses very quickly.

Become a member to access more valuable market updates like this.