Goldman Sachs Analysis: Strong Nvidia Earnings Can't Halt Stock Decline

Strong Earnings Met with Market Skepticism

Nvidia reported a 73% year-over-year revenue growth with positive AI business outlook, yet its stock fell 4.5%, weighing on the semiconductor sector and the S&P 500.

Market Turns Cautious

Goldman Sachs noted a 'sell the news' trend, with investors locking in profits and expressing concerns over the sustainability of AI-related capital spending by hyperscale cloud providers.

Growth Expectations Remain

While AI spending growth is forecast to slow to 62% by 2026 from 73% in 2025, supply-demand imbalances and strong balance sheets could still lift market expectations.

Industry Bottlenecks and Market Focus

Current data center demand and memory supply constraints support Nvidia's position, with market attention now shifting to 2027 when capital expenditure may peak.