NEW YORK (AP) — Nvidia is dragging Wall Street lower on Thursday after its latest blowout profit report wasn't enough to impress investors.
The S&P 500 fell 0.7% following its sharp swings earlier in the week driven by hopes and worries
created by the artificial-intelligence revolution. The Dow Jones Industrial Average was down 10 points, or less than 0.1%, as of 10:15 a.m. Eastern time, and the Nasdaq composite was 1.4% lower.Nvidia, whose chips are
helping to power the AI boom, reported another stellar quarter of profit growth that breezed past analysts’ expectations. It also gave a forecast for revenue in the current quarter that once again topped Wall Street’s estimates.
But such blowout performances have become so typical for Nvidia that this one failed to impress. Its stock sank 4.6%.
“Our customers are racing to invest in AI compute — the factories powering the AI industrial revolution and their future growth,” Nvidia CEO Jensen Huang said.
Worries are nevertheless building that those customers may eventually curtail their spending on Nvidia's chips and other AI investments amid doubts about whether they can make back all their billions of dollars through future gains in productivity.
Because Nvidia’s is the largest stock in the U.S. market by value, it has more influence on the S&P 500’s direction than any other. It alone accounted for more than two-thirds of the S&P 500's drop, and the index would have been higher if neither it nor rival Broadcom were members.
Back on the winning side of Wall Street Thursday was Salesforce, which rose 3.1% after it likewise reported a stronger profit for the latest quarter than analysts expected.
It’s a return to gains for the stock, which is still down more than 25% for the young year so far. It’s been under pressure because of worries that AI-powered competitors could undercut its business.
Salesforce uses AI itself in its platform that helps customers manage relationships with their own customers. It also made several announcements that typically give a stock’s price a boost: It will send up to $50 billion to shareholders through buybacks of its stock, and it increased its dividend.
“Agentic AI is a tailwind for our business,” CEO Marc Benioff said.
Salesforce also gave a forecast for revenue growth this fiscal year of 10% to 11%. The midpoint of that range fell slightly below analysts’ expectations.
Stocks of companies in industries as far flung as trucking logistics and financial services have also come under sudden and aggressive attacks by investors who fear their businesses may lose out to AI or even become obsolete. The sharpest swings have hit software companies, and a widely followed ETF that tracks the industry rose 2.2% Thursday to trim its loss for the year so far to below 22%.
Elsewhere on Wall Street, Warner Bros. Discovery shares edged down 0.3% after the entertainment giant reported a $252 million loss for the fourth quarter. That didn’t seem to bother investors, who are likely more interested in which acquisition offer — Netfix or Paramount Skydance — the company and its shareholders ultimately accept.
Some of the strongest action in financial markets was for oil, where prices swiveled as the United States and Iran hold indirect talks to try to reach a deal about Iran’s nuclear program. A peaceful solution would remove the threat of war, which could block the global flow of oil and drive up its price.
A barrel of benchmark U.S. crude briefly fell below $64 before erasing its loss and climbing back to $65.47, up 0.1%.
In stock markets abroad, indexes rose modestly in Europe following a mixed finish in Asia.
South Korea’s Kospi leaped 3.7% to another record, driven by gains for tech-related stocks. It’s already surged nearly 50% since the turn of the year.
Hong Kong’s Hang Seng, meanwhile, lost 1.4%.
In the bond market, Treasury yields eased. The yield on the 10-year Treasury fell to 4.02% from 4.05% late Wednesday.
A report showed that the number of U.S. workers applying for unemployment benefits ticked up last week, but not by any more than economists expected. It also remains relatively low compared with history.
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AP Business Writers Chan Ho-him and Matt Ott contributed.
