NVIDIA (NVDA) Stock Showing Resilience After Missing Earnings Estimates

Computing and artificial intelligence leader NVIDIA NVDA reported Q2 results Wednesday after the closing bell that missed estimates. It marked the first earnings miss for NVIDIA, a Zacks Rank #5 (Strong Sell), in nearly four years. With the stock holding up fairly well after the announcement, is the poor outlook already priced in?

Shares of NVDA have fallen about 40% since the beginning of the year. The company posted quarterly EPS of $0.51/share, a -8.93% negative earnings surprise versus the $0.56/share consensus estimate. The figure marked NVDA’s first miss since Q4 2018.

NVDA is part of the Zacks Semiconductor – General industry, which ranks in the bottom 40% out of approximately 250 industry groups. Earnings estimates have also been revised downward for future quarters, with analysts cutting Q3 projections by 31.8% in the past 60 days.

Shares have shown resilience following the recent announcement despite today’s decline. Still, the stock is overvalued relative to its industry group, so investors will have to pay up for future growth.