When regular companies report quarterly earnings, investors peruse them, and the shares move up, down or sideways. When those earnings come from Nvidia, however, the financial world tilts on its axis.
The chipmaker’s stock dipped on Wednesday even though it said that revenue and earnings roughly doubled, year on year. The only apparent wrinkle is that its forecast for next quarter’s revenue, at $37.5bn, is barely more than analysts expected, and that earlier in the year, the company was growing even faster. That said, CEO Jensen Huang has outdone his own estimates by about $2bn for the past 6 quarters, including the latest one.
Twitchiness is par for the course, because Nvidia’s fortunes increasingly drive everyone else’s. At $3.6tn the company is the world’s biggest by market capitalisation, and makes up 7 per cent of the S&P 500 index. Back in 2000 when Cisco briefly became the planet’s most valuable company, its weighting was less than 4 per cent of the S&P. As of Wednesday, Nvidia’s stock accounts for 24 per cent of the index’s gains this year.