(Bloomberg) — Results from the world’s biggest tech companies brought mostly good news. There’s only one piece missing: Nvidia Corp.
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The company, whose dominance in chips that do the heavy lifting for AI computing has made it the focal point of a market captivated by the burgeoning technology, is not expected to report results until May 22.
That’s well after other publications that showed rapidly rising profits, demand for artificial intelligence tools boosting sales of cloud computing services and signs of continued spending on AI equipment.
“You have huge chip buyers coming in and saying we were already buying a ton of them, we’re buying even more. The question for Nvidia is: is this enough? Mike Bailey, director of research at Fulton Breakefield Broenniman LLC, said Friday.
Nvidia shares rose 2.5% in early trading Monday.
Among Nvidia’s biggest customers, Meta Platforms Inc., Microsoft Corp., Amazon.com Inc. and Alphabet Inc. have all indicated that capital spending will continue at the current pace or increase this year.
Nvidia shares have rebounded since April 19, when AI hardware makers fell ahead of Big Tech’s first week of earnings. The stock is up 18% since then, but it’s still down about 5% from its March peak. As shares of other AI hardware makers fall following strong earnings reports, it’s clear that expectations are high.
Rival chipmaker Advanced Micro Devices Inc. fell nearly 9% on May 1, although it raised its forecast for AI accelerator sales this year to $4 billion from $3.5 billion. dollars. Super Micro Computer Inc., the server maker whose shares have gained more than 170% this year, fell 14% after its earnings report that included revenue and profit forecasts that far exceeded average industry estimates. analysts.
With earnings already roughly 80% of those of the S&P 500, technology and communications services companies are significantly beating earnings estimates. About 90% of technology and communications services companies beat earnings estimates, well above the benchmark index’s average of 79%, according to data compiled by Bloomberg.
Read more: Nvidia shares plummet to $290 billion as customers splurge on AI
The problem is that the results have struggled to move things along after a rally that sent the tech-heavy Nasdaq 100 stock index up more than 35% over the past 12 months. Both groups rank near the bottom of major S&P 500 sectors for stock price movements the day after earnings. The average change in the technology sector is down about 1.5% while communications stocks are down 2.7%.
UBS’s Solita Marcelli says AI computing stocks remain attractive, with combined capex from Microsoft, Alphabet, Meta and Amazon expected to exceed $200 billion this year, $20 billion more than the previous estimate .
“We are encouraged by the many positive aspects of technology fundamentals during the first quarter reporting season, which we believe…
