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Nvidia Stock Falls Despite Record Earnings
27 Feb
Summary
- Nvidia reported record quarterly sales of $68.1 billion.
- Despite strong earnings, the S&P 500 is up less than 1% this year.
- Tech stocks show skepticism with stretched valuations and AI concerns.
Nvidia recently reported record quarterly sales of $68.1 billion, a significant achievement that nevertheless led to a 5.5% drop in its shares. This market reaction underscores a broader trend in 2026 where strong corporate earnings are failing to fully sway investor sentiment. The S&P 500 has seen profits grow 15% year-over-year for five consecutive quarters, with revenue acceleration to 9.5%. However, the index has risen less than 1% this year.
Technology stocks are bearing the brunt of investor skepticism, with concerns over stretched valuations and the potential impact of AI on future earnings. The information-technology sector is experiencing its longest monthly decline streak since 2018. In contrast, materials stocks are showing sustained growth. Analysts suggest that companies are "growing into their valuations" due to strong performance, potentially making valuations more reasonable.
Despite the tech sector's overall struggle, some software companies like Salesforce and Snowflake saw gains following their earnings reports. Accenture experienced an 8.3% jump after announcing a significant deal with a French AI startup to aid European companies in deploying AI, though its shares remain down for the year.
