This article first appeared on GuruFocus.
Nvidia (NASDAQ:NVDA) shares fell about 3% on Tuesday morning trading as investors grew cautious ahead of the chipmaker’s quarterly results.
The sell-off extended a broader pullback in AI-focused names after downgrades from some research houses that questioned the economics of generative AI. Microsoft (MSFT) and Amazon.com (AMZN), both large Nvidia customers, were among those under pressure.
Advanced Micro Devices (AMD) slid about 4%, while TSMC (AVGO) fell about 3%. Meanwhile, Intel (INTC) saw 2% dip. A VanEck semiconductor ETF also retreated roughly 2%, reflecting weakness across the sector.
Nvidia is due to report results on Wednesday after the market close, and analysts expect adjusted EPS of $1.23 on revenue of $54.83 billion for the October quarter. Market watchers will focus on forward guidance and any comments about competitive dynamics in AI GPUs.
Some strategists say rivals are ramping capacity and could compress margins, while others still point to Nvidia’s first-mover advantage. The stock’s reaction sets a cautious tone ahead of earnings that may influence chip and software peers near-term.