Finally the bears have got a foothold in Nvidia after its mixed earnings. But tapping the brakes on the chip maker’s rally might be good for the stock and wider market.
Nvidia earnings were still super strong but a signaled decline in gross margin and slower year-over-year revenue growth raised some questions.
Markets have become accustomed to Nvidia delivering a “beat-and-raise” against revenue expectations to the order of $2 billion each quarter, and the January-quarter guidance fell short of that high bar. Its revenue forecast was ahead of consensus estimates by the smallest margin in seven quarters.
Bulls can point to the inevitable adjustment coming with the launch of Nvidia’s Blackwell AI chips. Once the company can ramp up supply to meet demand, both sales and margins should benefit. However, analysts seeking reassurance were given short shrift. “We guide one quarter at a time,” CEO Jensen Huang told them on a call.
That introduces at least a short-term window of uncertainty and a welcome reset of expectations. Nvidia investors need to get used to the idea that the planned release of a new AI chip generation each year will
inevitably lead to some bumpiness in its results.
For the wider market, it’s a reminder that investors can’t keep piling into one stock forever, as they have with Nvidia. But it’s no bad thing for traders to start looking elsewhere for returns, especially after increasing concentration in the so-called Magnificent Seven stocks for the past two years. Seeking out more diversity is surely healthy.
—Adam Clark
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Chip Maker Cites ‘Staggering’ Demand as It Beats Expectations
Artificial intelligence chip maker Nvidia cleared Wall Street’s high expectations. The world’s most valuable company reported strong October-quarter earnings, offered a higher-than-expected revenue forecast for its January
quarter, and said that even with next-generation Blackwell chip production at full capacity, it still won’t meet all the demand.
- Nvidia reported adjusted earnings of 81 cents a share and revenue of $35.1 billion. Third quarter data center revenue more than doubled from last year, to $30.8 billion. It is shipping its most
important product: an AI server with 72 Blackwell chips for AI model training and queries.
- Dell, Oracle, and CoreWeave have all posted photos of the new system, and Nvidia has shipped Blackwell to all major partners. But there are supply constraints. CFO Colette Kress said Blackwell demand is staggering, and is expected to exceed supply for several quarters in fiscal 2026.
- Nvidia said large cloud computing providers accounted for about 50% of its data center revenue in the third quarter. CEO Jensen Huang told analysts that the company will deliver more Blackwell chips than it previously estimated.
- Wall Street is impatient for more. Though Nvidia beat expectations for revenue guidance in the current quarter, that beat was by the smallest margin in seven quarters. It sees revenue of $37.5 billion for the January quarter at the midpoint, about $400 million above the FactSet consensus.
What’s Next: Huang also said that Blackwell revenue for the current quarter would exceed the company’s prior guidance of “several billion dollars” of revenue. Other companies driving demand for data center services are consumer internet and enterprise companies, it said.
—Tae Kimand Janet H. Cho
Bitcoin’s Smashing Records. It’s Taking MicroStrategy With It, Too.
The gains keep coming for Bitcoin—and its surge is also lifting MicroStrategy, the onetime software company that has made loading up on the world’s largest cryptocurrency its main business strategy.
- Bitcoin has set a record high for four straight trading sessions on the expectation that the Trump administration will ease crypto regulation, as well as institutional investors snapping up shares in exchange-traded funds that track the token’s price. The digital asset climbed above $98,000 early Thursday.
- MicroStrategy is also driving the digital currency higher. It’s plowed equity sales of $6.6 billion since Oct. 31. into Bitcoin purchases, and said
on Wednesday it had priced $2.6 billion of convertible debt that will be used to buy even more.
- The company’s own shares have also surged off the back of the crypto rally: MicroStrategy stock has climbed sixfold this year. It appears to be trading as a Bitcoin proxy, considering the extent of its purchases.
- But shares could still be vulnerable to a pullback, especially if Bitcoin retreats. As of Nov. 17, MicroStrategy was trading at a record premium to the value of its holdings of the cryptocurrency, which could be a sign its stock is in a bubble.
What’s Next: One reason cryptocurrencies appeal to investors is that they trade 24/7, and the same could soon be true for stocks. The idea of all-hours exchanges is gaining traction, especially given President-elect Donald Trump is likely to appoint a Securities and Exchange Commission chair far friendlier to Wall Street than current chief Gary Gensler.
—Andrew Bary, Callum Keown, George Glover, and Paul R. La Monica
Indian Billionaire Adani, Others Face U.S. Fraud Charges
Indian billionaire Gautam Adani faces federal charges of bribery, fraud, and deceiving U.S. investors to raise funds, according to an indictment in Brooklyn federal court released on Wednesday. Prosecutors also accused
several current and former executives of two of Adani Group’s energy companies.
- Prosecutors say Adani was involved in a scheme that paid more than $250 million to bribe Indian government officials to secure contracts worth billions of dollars, the indictment said. The group then lied about the bribery scheme as they sought to
raise capital from investors, prosecutors said.
- Adani Group in India couldn't be reached for comment. The company owns India’s biggest private port and is among the world’s largest coal traders. Gautam Adani has a net worth of $85.5 billion, according to Bloomberg, and is one of the world’s richest men, with a rags to riches story.
- Adani Group’s flagship Adani Enterprises lost more than half its stock value after the short selling firm Hindenburg published a report in January 2023 accusing it of
