A more than 7.5% slide in NVIDIA share price overnight, from its previously comfortable area above $125 to much lower levels around $116, was an immediate market response to the AI flagship company’s quarterly numbers in the extended trading on August 28.

Analyst polls anticipated NVIDIA earnings of $0.64 on revenue of $28.68 billion during the last three months, and the world’s most influencing chip maker freshly provided even better results, with both EPS (equity per share) and sales setting new record highs at $0.68 and $30 billion, respectively. However, a 150% jump in the profit line vs $0.27 YoY, as well as a 122% of annual growth if compared to $13.5 billion at the same season of 2023, failed to save NVIDIA from new dips.

Newswires blamed nervousness, as well as relatively slower pace of growth, despite a great breakthrough to all-time highs and entering an overbought territory on charts. As to NVIDIA’s own forward guidance, it projected Q3 sales revenue at $32.5 billion, plus or minus 2%, vs $31.9 billion in expert polls on average. The reasons behind a strange move down, Morgan Stanley noted earlier that, in order to satisfy the crowd, NVIDIA would announce this shining revenue guidance for the fiscal Q3, that was about $2 billion higher than the consensus view among analysts. Yet, the stock needed guidance “in the $33-34 (billion) range to be unchanged," Morgan Stanley commented.

To sum up, losing ground in the environment of increasingly lofty and unhealthy expectations temporarily descends NVIDIA from heavenly dreams to earth, at least to some extent. And it can be useful to prepare the next round of the AI-related rally in the future. The calm reaction of the CrowdStrike paper to its corporate results the same day may hint that NVIDIA’s temporarily pullback could be recovered soon, even if this week’s low may ultimately be located in the range between $108 and $115.