Asian tech stocks fall after Nvidia earnings report

tech stocks in Asia retreated on Thursday after us chip darling Invidia reported its second quarter earnings the chip Maker's earnings more than doubled in the 3-month period to $30 billion up 122% from a year ago but the firm's shares fell more than 8% in extended trading potentially wiping more than $200 billion off its market capitalization that triggered a broader sell-off across the board with tech and AI related stocks bearing the brunt South Korean chip heavyweight SK highins plunged more than 5% while Samsung Electronics fell more than 2.66% Nvidia is expecting $32.5 billion in revenue for the current quarter plus or minus 2% only just ahead of analysts consensus expectations it also authorized another $50 billion in share BuyBacks and now a quick look at some of the other top business stories from around the world new car sales in the European Union Rose slightly by 0.2% in July despite drops in France and Germany battery electric vehicles lost market share with sales in Germany falling nearly 37% growth in Belgium the Netherlands and France weren't enough to offset the decline in Germany meanwhile analysts claim that mixed Trends in car sales across Europe are partly due to different green policies and new tariffs aimed at keeping out cheaper Chinese electric vehicles Burkshire Hathaway's market value has topped $1 trillion showing strong investor confidence in Warren Buffett's company the group made around $23 billion in profit in the first half of the year a 26% increase from last year Burkshire also sold more than half of its Apple shares boosting its cash reserves to nearly $277 billion Australian Airline Quantus has reported a 28% drop in net profit to 849 million blaming low Affairs and reduced rate Revenue the airline is dealing with the cost of improving customer services after several public scandals officials said the company is focused on rebuilding its reputation while adjusting to post pandemic Market changes but despite the profit drop Quan's Revenue increased by 10.7% to more than $4 billion and telegram founder paval durov is under investigation in France for alleged links to organized crime through the messaging app he has not been jailed but is under judicial supervision and must pay a $5.6 million deposit during is required to report to a French police station twice a week and cannot leave the country he was detained last Saturday at a Paris airport under a warrant related to the app now let's go back to Nvidia and get more on that with Josh Mahoney in London he's Chief Market Analyst at scope markets hi there Josh now Nvidia has delivered some pretty strong earnings yet its shares fell significantly what factors might have contributed to this unexpected Market reaction yeah I mean look they posted some bumper numbers and markets just didn't bat an eyelid instead we saw them down around 8% at at the most and now uh roughly around about 6 to 7% down I mean they managed to beat across every single metric and maybe it's just the case that markets have grown so accustomed to them beating that they expect them to beat by even more and that's the thing where we're looking at their outperformance you've seen them beat on earnings you've seen them beat on revenues you've seen them beat on the gaming side of things the data center side of things and the one area that people are pinpointing is their outlook for Q3 which is better than expected but if you take the wide range of expectations within the markets and you look at the median they beat that they didn't beat the absolute top end of those expectations so you could say that some people are disappointed uh but I wouldn't necessarily look at this and think this is the moment where the Market's going to top out out and instead this is probably the moment that many people will be looking at and thinking the company continues to go from strength to strength this pullback uh is likely to represent an opportunity and I do expect that we'll most likely down the line find ourselves back up into record territory right now nvidia's latest numbers had been hotly anticipated by investors for signs on how the AI boom has been fairing so what is it telling us exactly it's telling us that the AI boom is continuing and that these big companies in particular of which uh make up their main customers continue to allocate more and more money towards AI now there's a feeling Within These main customers many of which are the the rest of the mag 7 names that if they don't continue to invest they're going to fall behind down the line so whilst we're not necessarily seeing huge outcomes in terms of uh revenues and profits to these other companies attributed to AI specifically they're clearly building out new structures uh that they would think down the line will be able to bring down costs and raise Productions bring on new products that perhaps at the moment we haven't even dreamt of and that leads us into the question of how things are going to look down the line when they have their new chip coming out which is Blackwell there had been question marks about the potential delay to that production but the fact of the matter is if they're beating on estimates and they haven't even uh moved on to their new chip then that gives them a new source of demand once we see that coming into play they have expectations that they will be moving into production in Q4 and ramping up production over the course of 2025 into 2026 so again there's plenty of optimism around here right now the selloff in Nvidia shares overnight triggered a broader decline in Tech and AI related stocks across Asia how do you see this impacting the overall Tech sector in the region well like I said I don't necessarily think there's a massive justification for this decline for NVIDIA in itself and therefore you can probably glean something fairly similar when it comes to their competitors I think when we came into this earning season there had been big concerns around whether the Skyhigh valuations that have been attributed to some of these Tech names are Justified and now we're out of the woods I mean we've seen all mag 7even names report and whilst they haven't all gone up we certainly haven't seen any cause for concern around a potential collapse in any of these big names and certainly now that we've got Nvidia which is the highest sort of fastest growing of the lot uh behind us now and with very strong numbers I think we might see a little bit of sort of volatility over the near term which is exactly what we're seeing um but if you look back to the back end of last earning season we then saw Nvidia push onwards and upwards and gain something like 25% beyond that initial pop that we saw for earnings we saw them gaining 25% up and until this latest earnings season so it can provide the basis for a nice period of strength where the earnings concern is now behind us