Nvidia shares fall by more than 6% despite record sales

Nvidia, the US based chip manufacturing company, announced that its revenue for the 3 months till the end of July has reportedly doubled compared to the previous year, achieving a record $30 billion.

Despite having achieved the record figures, the firm’s shares fell by 6 per cent in New York. The results of the company that have become a quarterly event usually sends Wall Street into a frenzy of buying and selling shares.

The company has benefitted immensely from the AI boom that has taken over recently in the 21st century. The valuation of the company has surged ninetimes within 2 years to a skyrocketing stock valuation worth $3 trillion. 

This year, the company saw its share rise by more than 160 percent. Profits for the period also soared high, with the operational income riing 174 percent from the $18.6 billion achieved last year.

According to reports, Nvidea has beaten analysts expectations on both sales and profits for 7 consecutive years. “Its less about beating market estimates now, markets expect them to be shattered. It’s the scale of the beat today that looks to have been disappointed”, senior equity analyst at Hargreaves Lansdown, Matt Britzman said. 

It is also being said that the Nvidia has become the face of AI, and this has helped in its high valuation as the results show. But this can result in the opposite also if the high expectations are not met properly. 

The company’s competitor like Intel can take away the chunk of market share if not taken seriously.