On Wednesday, Nvidia Corp (NASDAQ:NVDA) delivered blockbuster quarterly results and raised its outlook, but the stock’s muted after-hours reaction sparked debate on Wall Street about expectations and long-term growth.
Record Results, Strong Outlook
CNBC’s Jim Cramer took to X and said the after-hours decline in shares of Nvidia was unwarranted, calling the pullback “a mistake” following a quarter that exceeded already high expectations.
Nvidia shares gained 1.44% during Wednesday’s regular session, reaching $195.62. In the after-hours trading, it declined briefly, but at the time of writing, the price was up by 0.15% at $195.92, according to Benzinga Pro.
Meanwhile, Deepwater Asset Management’s managing partner Gene Munster said the market’s response reflects broader concerns about the sustainability of the company’s growth, even as results topped forecasts.
Munster said he expects Nvidia to continue performing well and sees further upside in the stock. However, he noted that the potential gains may be more limited compared with some other AI companies, partly due to its large market size.
The chipmaking giant currently has a market cap of $4.75 trillion.
Nvidia Issues Strong Outlook, Excludes China Revenue
Nvidia reported fourth-quarter revenue of $68.13 billion, up 73% year over year and above Wall Street estimates.
Earnings per share came in at $1.62, also ahead of expectations. The company projected first-quarter revenue between $76.44 billion and $79.56 billion, well above analysts’ estimates, while forecasting gross margins near 75%.
During the earnings call, Nvidia executives said they are not assuming revenue from China in their outlook and that future shipments remain uncertain.
“While small amounts of H200 products for China-based customers were approved by the U.S. government, we have yet to generate any revenue, and we do not know whether any imports will be allowed into China,” said Nvidia CFO Colette Kress.
Analysts Focus On Expectations
Shay Boloor, chief market strategist at Futurum Equities, said Nvidia’s stock moves are driven less by whether it beats estimates and more by whether it tops already high expectations.
He said investors have grown used to consistent upside and now expect outsized results each quarter.
Futurum Group CEO Daniel Newman also took to X and pushed back on broader market skepticism, suggesting that critics of the AI trade are retreating as momentum continues.
NVDA shows a strong price trend across short, medium and long-term periods, though it carries a low Value ranking, according to Benzinga’s Edge Stock Rankings.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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