Nvidia Crushed Earnings — Then Lost $260 Billion Anyway

Nvidia just delivered the kind of quarter most companies would frame and hang on the wall. Revenue of $68.1 billion, up 73% year-over-year. Net income of $43 billion — that’s $330 million in profit per day. Data center revenue alone hit $62.3 billion, accounting for 91% of total sales and blowing past the $60.7 billion Wall Street expected. First-quarter guidance came in at $78 billion, above even the most optimistic buyside whispers.

And the stock dropped 5.5%, erasing roughly $260 billion in market value in a single session. That’s more than the entire market cap of most S&P 500 companies — gone in a day.

Welcome to the new normal for Nvidia, where beating earnings is the bare minimum and anything short of a miracle gets punished. Over the past five quarters, the stock has tripled on the back of relentless beats. Options markets had priced in just 5.6% implied move — the lowest in three years — signaling that the “beat” was already baked in. Without a genuine upside surprise beyond the surprise everyone expected, there was nothing left to buy.

The real concern isn’t what Nvidia reported — it’s what it didn’t say. Investors wanted clarity on 2027 growth, and the earnings call didn’t deliver it. The $100 billion OpenAI partnership deal, once seen as a lock, now has “no assurance” language buried in Nvidia’s 10-K filing. Meanwhile, a broader anxiety is building around whether the AI capex boom is sustainable. Hyperscalers like Microsoft, Amazon, Google, and Meta are expected to spend over $1.1 trillion on AI infrastructure in 2026, but the downstream monetization hasn’t caught up. Bank of America’s latest fund manager survey flagged high AI capex as the second-largest systemic credit risk.

There’s also the inference question. As the industry shifts from training AI models (Nvidia’s sweet spot) to running them at scale, competitors could chip away at Nvidia’s dominance. Fundstrat’s Hardika Singh noted that Nvidia “missed on easing investors’ concerns about its narrowing moat in the evolving world of compute.” Jensen Huang pushed back, highlighting that the upcoming Vera Rubin architecture is specifically designed for inference workloads — but markets aren’t in the mood for patience.

Broadcom dropped 3%, Taiwan Semiconductor fell 2.8%, and the entire chip complex felt the gravity. The S&P 500 and Nasdaq both stumbled, weighed down by the sector that’s been carrying them for two years.

Here’s the thing, though: 61 out of 66 analysts still rate Nvidia a buy, with an average price target implying 37% upside. Janus Henderson’s Richard Clode called the $78 billion guidance “well ahead of even the most bullish expectations” and noted it marks the fourth straight quarter of accelerating growth. At a P/E of 48.5x — steep, but not insane for a company growing revenue 73% annually — the valuation math still works if the AI spending cycle holds.

The real takeaway isn’t that Nvidia is broken. It’s that the stock has become a barometer for the entire AI trade, and right now, that trade is running on emotion, not logic. When the best earnings report in the company’s history triggers a $260 billion wipeout, you’re not trading fundamentals anymore — you’re trading sentiment. And sentiment, unlike Nvidia’s revenue growth, can turn on a dime.