ASIAN markets experienced a mixed reaction on Thursday, November 21, as shares in some regions declined despite another impressive earnings report from chip manufacturing giant Nvidia, which significantly exceeded analysts’ expectations. However, this success did not translate into widespread optimism among investors, who remained cautious amid rising geopolitical tensions.
Bitcoin surged to an unprecedented high of over US$95,000, persisting in its ascent towards the coveted US$100,000 milestone, buoyed by speculation that the incoming U.S. president will herald a new era of relaxed regulations for cryptocurrencies. This bullish momentum has contributed to a nearly 40 per cent increase in Bitcoin’s value since the electoral victory earlier this month.
All eyes had been intently focused on Nvidia’s earnings report, given its prominent role in sparking a global technology boom characterized by insane demand for AI-related products and services, which in turn has pushed several markets to achieve record-breaking performance recently.
Ultimately, the company announced remarkable numbers, reporting a staggering US$19 billion profit and record revenue of US$35.1 billion for the third quarter of the fiscal year, surpassing estimates by a noteworthy US$2 billion.
Nevertheless, Nvidia’s shares witnessed a decline in after-hours trading, despite CEO Jensen Huang’s confident declaration that the “age of AI is in full steam,” indicating a global shift towards Nvidia’s computing capabilities, and stated that the highly anticipated Blackwell processing platform is now fully operational.
Potential investors had hoped for an even more outstanding performance report; indeed, Bloomberg noted that expectations ran as high as US$41 billion in sales projections.
Despite boasting an astronomical rise of over 200 per cent in share price year to date, Nvidia’s stock dipped by approximately four per cent in after-hours trading.
As the world’s most expensive publicly traded company, Nvidia’s performance has become an essential indicator of health in the technology sector, and market experts are closely watching its trajectory.
“I have a feeling we’ve reached peak Nvidia,” remarked Pendal Group’s Amy Xie Patrick during her appearance on Bloomberg Television. “This is a stock that beat analyst estimates but didn’t beat enough.”
And SPI Asset Management’s Stephen Innes further added: “The bigger question remains: where exactly is the bar for Nvidia now? With expectations veiled in sky-high optimism, even seasoned analysts struggle to get a clear read.
“With so many portfolios already brimming with Nvidia stock, some investors might see this quarter’s results as a minor letdown.”
But he added: “Still, the strength of the numbers, paired with the pipeline of Blackwell chip orders, is enough to keep the dream alive.”
Markets in Asia were mixed in early trade, with significant indices in Tokyo, Hong Kong, Shanghai, Sydney, Taipei, and Manila trending downwards, while slightly more favorable activity was observed in Singapore, Seoul, Wellington, and Jakarta.
Investors have also been spooked by developments in the Ukraine conflict after Ukraine was reported to have utilized missiles supplied by the United States against Russian forces. This worrying situation escalated further with reports of UK-supplied rockets also being deployed.
After Russian Foreign Minister Sergei Lavrov commented that the use of U.S. missiles indicated that Western nations aimed to “escalate” the ongoing conflict, he warned that “we will be taking this as a qualitatively new phase of the Western war against Russia.”
In an alarming context, Russian President Vladimir Putin enacted a decree lowering the threshold for potential nuclear weapon utilization, heightening global tensions.
Investors are also keenly observing Trump’s cabinet selections, as the potential appointment of noted China hawk Howard Lutnick as commerce secretary raises concerns about a renewed trade war. Lutnick has openly endorsed a staggering 60 per cent tariff on Chinese goods, as well as a 10 per cent tariff on all other imports, signifying a tough stance on trade relations.
What factors contributed to Nvidia’s shares declining after their strong earnings report, and how do investor expectations play a role in market reactions?
**Interview with Financial Analyst: Discussing Nvidia’s Earnings and Market Reactions**
**Interviewer:** Good afternoon, and welcome. Today, we have with us Jane Doe, a financial analyst with extensive experience in the tech sector. Jane, thank you for joining us to discuss the recent developments around Nvidia and its impact on the markets.
**Jane Doe:** Thank you for having me.
**Interviewer:** Let’s dive right in. Nvidia recently reported impressive earnings, boasting a profit of $19 billion and record revenue of $35.1 billion for the third quarter, which exceeded expectations by $2 billion. Why do you think this strong performance hasn’t translated into a positive reaction in the market?
**Jane Doe:** That’s a great question. Despite the remarkable earnings report, market sentiment appears cautious due to rising geopolitical tensions. Investors tend to be risk-averse in such environments, which can overshadow even stellar financial results. Additionally, Nvidia’s stock had already seen a significant rise—over 200% year to date—so some profit-taking is perhaps inevitable after such a run-up.
**Interviewer:** You mentioned profit-taking. Nvidia’s shares actually declined about 4% in after-hours trading following the report. Is this a sign that investors had unrealistic expectations?
**Jane Doe:** Exactly. There were indeed elevated expectations, with some speculating around $41 billion in sales projections. When a company doesn’t meet those lofty benchmarks, even if it performs exceedingly well, investors may feel a bit let down. This creates a dynamic where good news can be overshadowed by unmet expectations.
**Interviewer:** Speaking of expectations, Nvidia’s CEO Jensen Huang remarked that the “age of AI is in full steam.” How significant do you think this sentiment is for Nvidia’s future?
**Jane Doe:** It’s very significant. Nvidia’s growth is closely tied to the AI boom. The demand for their products and services, particularly in AI, continues to grow. Investors will be looking closely to see if Nvidia can maintain momentum—especially with new offerings like the Blackwell processing platform. This will be crucial for its trajectory moving forward.
**Interviewer:** In light of all this, what do you think analysts like Amy Xie Patrick and Stephen Innes are suggesting with their commentary?
**Jane Doe:** Their insights reflect a state of caution. Patrick’s comment about potentially reaching “peak Nvidia” indicates that there might be a ceiling on growth expectations at this time. Innes’s thoughts about the difficulty in gauging future expectations highlight the uncertainty that surrounds a high-valued stock like Nvidia. With many portfolios already heavily invested, there could be hesitance to continue buying at these valuation levels unless there’s more clarity in Nvidia’s future performance.
**Interviewer:** Thank you, Jane, for sharing your insights on Nvidia and the market trends. It’s clear that while Nvidia’s performance is impressive, it also illustrates the complexity of market reactions amid broader concerns.
**Jane Doe:** Thank you for having me. It’s always a pleasure to discuss these dynamics.
**Interviewer:** That’s all for today. Join us next time as we continue to explore the latest in market trends and tech developments.
