Nvidia's (NVDA) quarterly report once again came in stronger than expected, but the market reaction was muted. The company's shares rose only 4% after the close of trading on Wednesday, while four other corporations that reported on the same day showed more impressive momentum. These were Okta, Salesforce, CrowdStrike, and Veeva Systems.
Nvidia reported adjusted earnings of $2.22 per share on revenue of $96.22 billion for the second fiscal quarter. Both figures exceeded analyst consensus forecasts, which expected $2.10 per share and $92.17 billion in revenue. The company also gave an optimistic outlook for the third quarter — $108 billion in revenue, above the average market estimate. Nevertheless, investors appear to have already priced in these results, and Nvidia shares failed to show significant growth.
Okta and Salesforce led the rally
The most notable outperformer was Okta (OKTA), whose shares jumped approximately 19% in after-hours trading. The company, which specializes in digital identity management, earned $1.05 per share on revenue of $805 million, beating forecasts of $0.97 and $795 million, respectively. Okta also raised its full-year guidance for profit and revenue, which strengthened investor confidence.
Salesforce (CRM) gained about 13% after releasing its results. The company's adjusted profit more than doubled to $5.90 per share, helped by investment income. Net revenue reached $11.35 billion versus the expected $11.32 billion. If the gain holds, it will add roughly 160 points to the Dow Jones Industrial Average on Thursday.
CrowdStrike (CRWD) rose approximately 10% on the back of beating expectations for both revenue and earnings per share. Its third-quarter guidance matched estimates for profit and came in higher on revenue. Veeva Systems (VEEV), a software developer for the pharmaceutical industry, gained about 7%, also surpassing analyst forecasts on both key metrics.
Less noticeable moves and one laggard
Among other companies that reported on Wednesday, shares of Agilent Technologies (A) rose 4% — the same as Nvidia's stock. Agilent's third-quarter revenue came in at $1.88 billion, exceeding the FactSet forecast of $1.84 billion. Everpure (formerly Pure Storage) gained approximately 2%, reporting earnings of $0.70 per share on revenue of $1.19 billion — both figures came in above expectations.
At the same time, shares of Urban Outfitters (URBN) fell approximately 5%, despite results matching expectations. The company's profit did not include a one-time duty refund.
Trading on Wednesday clearly demonstrated that merely beating profit forecasts is not enough for confident stock gains. Long-term prospects and management commentary have a much greater impact on quotes. Investors should closely watch whether these levels hold after the market opens on Thursday.
My comment: The market is gradually shifting its focus from quarterly figures to the sustainability of business models and companies' ability to generate cash flow amid macroeconomic uncertainty. Nvidia continues to dominate the AI segment, but investors are already seeking diversification in other technology niches, which explains the stronger reaction to Okta's and Salesforce's reports.