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To: Johnny Canuck who wrote (59171)	5/9/2024 10:26:47 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68500

Nvidia Stock Slips. Why AI Chip Plays Are Having a Tougher Time.Last Updated: May 9, 2024 at 10:18 a.m. ETFirst Published: May 9, 2024 at 4:59 a.m. ET By Adam Clark comments 0 Email icon Facebook icon Twitter icon Linkedin icon Flipboard icon Reprint Print icon Resize icon Referenced Symbols NVDA -2.01% ARM -3.63% SPX +0.15% COMP -0.08% AMD -1.52% INTC +0.80% Listen to article Length3 minutes Nvidia’s chips are the favored hardware for training artificial-intelligence models. COURTESY NVIDIA Stock in Nvidia was edging down as the chip maker faces a high bar for its coming earnings report. The reaction to results from fellow artificial-intelligence favorite Arm Holdings suggests the market is looking for a sharp increase to its financial guidance. Nvidia shares were down 1.2% in early trading at $893.15. The stock closed down 0.2% on Wednesday. The stock has recovered from a brief drop below $800 last month, bolstered by an earnings season in which big technology companies reaffirmed their commitment to spending billions on artificial-intelligence infrastructure, including on Nvidia’s chips. However, it remains below the highs of around $950 reached earlier in the year. That might be due to cautiousness around Nvidia’s own earnings report on May 22. Expectations are high for suppliers of AI hardware. Nvidia shares have risen 83% this year through to Wednesday’’s close. That compares with a 8.8% rise in the S&P 500 index and a 8.6% rise in the Nasdaq Composite Index over the same period. Nvidia’s gain has been enough to make some investors take profits. The billionaire Stanley Druckenmiller said in an interview with CNBC on Wednesday that his firm cut his stake in the company in late March. An awful lot of growth is priced into the stock’s valuation: Nvidia is trading at 76 times its earnings over the past 12 months. On a forward price-to-earnings basis, it trades at a multiple of 34 times. That means Nvidia is under pressure to keep up its record of reporting significantly higher earnings than expected. The latest evidence of the market’s tough approach to any underwhelming news came from chip designer Arm Holdings, which was down 4% after its guidance for fiscal 2025 came in line with Wall Street estimates. Nvidia is expected to report earnings per share of $5.21 and revenue of $22.74 billion for its April quarter, according to a FactSet poll. However, its guidance is likely to be the key factor. “Most investors appear to have a good sense as to what Nvidia could earn in CY [calendar year] 2024 and are rather focused on the trajectory of the Data Center business into CY2025,” wrote Goldman Sachs analyst Toshiya Hari in a research note this week. Among other chip makers, Advanced Micro Devices was down 0.2% and Intel was off 0.3% in morning trading. AMD fell 6% following its own earnings report last week, although it has since recovered some of those losses. Write to Adam Clark at adam.clark@barrons.com