TL;DR
- Nvidia’s Q2 Earnings Beat Expectations: Nvidia reported revenue of $30 billion for Q2 2024, a 15% increase from the previous quarter, but its stock price fell despite the strong performance.
- AI Tokens React Negatively: Major AI-related cryptocurrencies, including FET, TAO, and RNDR, experienced significant dips following Nvidia’s earnings report, highlighting the market’s high expectations.
- Analysts’ Insights and Historical Context: Analysts noted that Nvidia’s earnings, while strong, did not meet investors’ lofty expectations, leading to a ‘sell the news’ reaction. This pattern has been observed in previous quarters as well.
Nvidia, the renowned chipmaker, recently announced its second-quarter earnings for 2024, surpassing Wall Street’s expectations. The company reported a revenue of $30 billion, a 15% increase from the previous quarter and approximately $1.32 billion above prior estimates. Despite these impressive figures, Nvidia’s stock price experienced a decline, closing at $125.61 and falling further to $116.95 in after-hours trading.
NVIDIA $NVDA JUST REPORTED EARNINGS
EPS of $0.68 beating expectations of $0.64
Revenue of $30B beating expectations of $28.7B pic.twitter.com/EH1zZHvVd8— Evan (@StockMKTNewz) August 28, 2024
AI Tokens React to Nvidia’s Performance
The performance of AI-related cryptocurrencies has been closely linked to Nvidia’s earnings reports. Following the release of Nvidia’s Q2 earnings, major AI crypto tokens experienced a significant dip.
Artificial Superintelligence Alliance (FET) fell by approximately 7.8% to $1.21, Bittensor (TAO) dropped 4.6% to $303, Render (RNDR) decreased by 6.4% to $5.71, and Near Protocol (NEAR) dropped 1.2% trading at $4.26. ICP broke the trend and gained nearly 1% trading at $8. This reaction highlights the market’s high expectations for Nvidia and the sensitivity of AI tokens to the company’s performance.
Market Analysts Weigh In
Market commentators and analysts have noted that while Nvidia’s earnings were better than expected, they did not meet the lofty expectations set by investors. Lisa Abramowicz, a market commentator, mentioned that “better-than-expected doesn’t cut it for Nvidia,” emphasizing the high bar set for the company. Bloomberg’s Ed Ludlow added that despite the earnings beat, there is no demand issue for Nvidia, and the company’s business remains strong.
Historical Context and Future Outlook
This isn’t the first time AI crypto tokens have reacted to Nvidia’s earnings. After the release of Q1 earnings in May, AI tokens also tumbled despite a revenue jump of 18% from Q4 2023.
The recent dip in AI tokens following Nvidia’s Q2 earnings suggests a pattern where the market’s high expectations lead to a ‘sell the news’ reaction, even when the company’s performance is strong.
As Nvidia continues to play a crucial role in the AI industry, the performance of AI-related cryptocurrencies will likely remain closely tied to the company’s earnings and market sentiment. Investors and market participants will be watching closely to see how these dynamics evolve in the coming quarters.
