Thu Feb 27 20:10:00 UTC 2025: ## Nvidia Stock Dips Despite Strong Earnings, Lower-Than-Expected Margin Guidance Spooks Investors

**Sunnyvale, CA** – Nvidia (NVDA) shares plummeted approximately 6% Thursday afternoon, despite exceeding Wall Street’s expectations for fourth-quarter earnings. The dip stems from the company’s first-quarter gross margin guidance, which fell short of analyst predictions.

While Nvidia reported record revenue of $39.3 billion and earnings per share of $0.89, surpassing Bloomberg consensus estimates, its projected first-quarter gross margin of 71% lagged behind the anticipated 72.1%. This shortfall, according to JPMorgan analyst Harlan Sur, is attributed to increased shipments of its new Blackwell AI GPUs and associated expedite fees to meet high demand.

Despite the lower margin projection, Nvidia anticipates robust first-quarter revenue of $43 billion, exceeding analyst expectations of $42.3 billion. The company’s Blackwell GPUs alone contributed $11 billion to Q4 revenue – a record-breaking performance described by CFO Colette Kress as the fastest product ramp in company history. This success comes despite earlier concerns regarding production delays and reported overheating issues.

However, analysts expressed concerns about the margin guidance. Benchmark analyst Cody Acree cited pricing pressure and increased competition as potential contributing factors. While acknowledging the strong demand, he suggested that navigating these challenges is crucial for Nvidia’s future.

Despite the stock’s decline, several analysts remain bullish. Stifel’s Ruben Roy and Truist Securities’ William Stein reiterated their buy ratings, citing the impressive Blackwell rollout as a positive indicator for future AI chip production. Other analysts, including those from Bernstein, Raymond James, and Citi, also emphasized the strong Blackwell performance and maintained positive outlooks.

The decline in Nvidia’s stock price also impacted other semiconductor companies. Micron (MU), TSMC (TSM), Dell, Super Micro Computer, Broadcom (AVGO), and Advanced Micro Devices (AMD) all experienced share price drops. The overall five-day decline for Nvidia stands at 12%.

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