Dozens of people gathered at a bar near Madison Square Park in Manhattan on Wednesday afternoon to celebrate the event that has become the financial market’s Super Bowl: Nvidia’s NVDA -2.10%decrease; red down pointing triangle earnings.
While sipping beer and wine and watching CNBC at The Storehouse, they talked about their positions as the financial results trickled in. Some said they were hoping for an exuberant evening, with a big pop in the stock. Others came just to enjoy the show, to network or to boast that they attended their first earnings watch party.
They counted down before the earnings release hit the tape, cheering and then booing when the stock ticked lower. In the end, the event fizzled pretty quickly. The crowd thinned by 5 p.m. as the shares slumped.
Nvidia, the graphics chip maker that has morphed into a cultural phenomenon and a symbol for the mania surrounding artificial intelligence, reported second-quarter earnings and revenue that more than doubled from a year earlier. Although the results exceeded Wall Street’s expectations, the scale of the beats paled in comparison with recent quarters. Shares slumped about 7% in after-hours trading.
“It’s a little disappointing,” said Marty Jaramillo, a sports injury analyst at CBS Sports, on the stock move. “In and of itself, Nvidia hit a home run today, but they’ve hit so many home runs in past quarters.”
Expectations have gotten too high, he said.
Not everyone was bullish. Some attendees said they thought the party itself was a signal of a market top.
“It’s fun, it’s like a cultural thing,” said Andrew Pignanelli, who is 23 years old and attended with his roommate. “You don’t have to be here to root for the winning team.”
He said he first bought Nvidia shares as a teenager in a parent’s brokerage account, though he didn’t hold on.
Quarterly earnings results, a required routine check-in for public companies in the U.S., rarely generate such fanfare. Nvidia isn’t just any company.
It is the best-performing stock in the S&P 500 this year, more than doubling in 2024 so far after more than tripling in 2023. Worth more than $3 trillion, Nvidia is one of the most valuable companies in the world and has an outsize impact on the direction of the market benchmarks. It is also a bellwether that could influence investor sentiment.
Heading into this week, some market watchers questioned whether Nvidia Chief Executive Jensen Huang’s comments on his quarterly earnings call would be more important for the market than Federal Reserve Chair Jerome Powell’s address in Jackson Hole, Wyo. At the annual gathering last week, Powell laid out plans for a monumental pivot in interest-rate policy in coming months.
In prior quarters, Nvidia earnings results have led to market reactions that rival those seen after reads on the entire U.S. economy, such as a monthly labor report or inflation figures, according to Deutsche Bank. Ahead of the release, traders were betting on a swing of around $300 billion in Nvidia shares after the report.
So far, a reaction to that degree hasn’t materialized.
Nvidia Delivers Strong Quarterly Earnings as Stock Falters“There are people putting the entire U.S. stock market on the shoulders of Nvidia,” said Michael Antonelli, a managing director at Baird. “Which seems absurd.”
Memes and predictions about the earnings flooded social media ahead of the report. Shareholders and market nerds alike on X shared variations of the greeting: “Happy Nvidia earnings day to all who celebrate.” Others were more poetic.
“Twas the night before Nvidia earnings, / And all over Wall Street, / So many were hoping for a sweet bullish beat,” the financial writer Christopher Robb said in a 14-line rhyming poem posted to X and LinkedIn.
“Godfather of AI on deck; get the popcorn out,” wrote the tech bull Dan Ives of Wedbush Securities in a note to clients.
In one sign of the enthusiasm swirling around the results, the social-media platform Stocktwits offered an “$NVDA Day ‘Bought the Dip’ Snapback” hat for $33 on the site. A beanie with the ticker splashed on the front in white retailed for $23.
For some of the amateur investors who have held on to Nvidia, the stock’s wild ride has allowed them to retire early, travel, pay off debt or save up for a house. Around 30% of Nvidia shares are owned by individual investors and smaller asset managers, according to FactSet.
David Osterweil, a 47-year-old entrepreneur, first purchased Nvidia in 2020 and has held on to the stock, trimming some of his position periodically to lock in profits. He said his gains from investing in Nvidia are helping him pay for his son’s bar mitzvah.
He wasn’t concerned about Wednesday’s earnings report, saying expectations had been very high going into the report.
“I think it’s slow and steady growth over time,” he said. “It’s still very much a long-term hold.”
Write to Gunjan Banerji at gunjan.banerji@wsj.com and Hannah Miao at hannah.miao@wsj.com
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