Stock Market Today, Aug. 27: Nvidia Surges on Blowout Results and Surprising Guidance
Nvidia (NASDAQ:NVDA), the AI chips, GPUs, and data-center networking provider closed at $227.98, up 8.74%. Investors bought the stock after blowout quarterly results and revenue guidance eased fears of an AI slowdown. Investors are watching the supply and-demand dynamic and digesting impressive revenue guidance for next year.
Trading volume reached 293.3 million shares, coming in about 106% above its three-month average of 142.1 million shares. Nvidia IPO'd in 1999 and has grown 555,720% since going public.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) closed at 7,731, up 0.72%, while the Nasdaq Composite (NASDAQINDEX:^IXIC) closed at 26,541, up 1.57%. Among semiconductor peers, Advanced Micro Devices (NASDAQ:AMD) closed at $476.67, down 0.89%, while Broadcom (NASDAQ:AVGO) closed at $371.54, up 4.49%, as Nvidia's results kept AI-chip investors focused on data center demand.
What this means for investors
Nvidia answered many questions and soothed investor concerns with its earnings report last night. Revenue more than doubled year over year, helping to show that growing competitive offerings of specific types of processing units aren't denting demand for Nvidia's hardware and software.
It wasn't just sales, either. The company maintained its gross margin at 75%, though it expects that to dip in the next quarter due to rising memory costs.
The real surprise was guidance for revenue to grow even faster next year. Guidance for about 70% growth was nearly twice what analysts expected for calendar year 2027.
Nvidia has been investing its excess cash in the AI sector, too, and that's now also looking to be beneficial for stakeholders as data center demand continues to accelerate.
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Howard Smith has positions in Broadcom and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, and Nvidia. The Motley Fool has a disclosure policy.
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