The much anticipated earnings report from Nvidia came out yesterday. $30Bn of revenue in the quarter which represents 122% growth vs same quarter last year. Guidance for next quarter was also better than expected. And they also announced a $50Bn increase in its buyback program. Despite all that, the stock fell 6-7% after hours and it’s down almost 4% pre-market. This results are incredibly important for the market, as the concentration on AI related stocks is close to all time highs. As you can see in the chart below, NVDA’s weight on the index has increased from less than 1% of the S&P500 before Chat GPT, to more than 6% today. And the combined weight of AI related stocks is more than 30% of the index. Demanding valuations, combined with big concentration. Not a great place to be.
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