Nvidia's (NVDA) quarterly report once again confirmed the company's status as a leader in the artificial intelligence industry, but the market reaction was far from impressive. While shares of the chipmaker itself rose only 4% after the close of trading on Wednesday, four other companies showed significantly stronger momentum, reporting results that beat Wall Street expectations.
Nvidia's financial results for the second fiscal quarter came in above the consensus forecast: adjusted earnings were $2.22 per share on revenue of $96.22 billion. Analysts on average expected $2.10 and $92.17 billion, respectively. Moreover, the company's management gave an optimistic outlook for the third quarter, promising revenue of $108 billion, which also exceeded market expectations. Despite this, investors received the report cautiously, which opened the door for other players in the technology sector to attract capital attention.
Growth leaders: Okta, Salesforce, CrowdStrike, and Veeva
The most striking event in after-hours trading was the surge in Okta (OKTA) shares by approximately 19%. The company, which specializes in digital identity management, earned $1.05 per share on revenue of $805 million, while analysts forecast $0.97 and $795 million, respectively. In addition, Okta raised its annual profit and revenue guidance, which strengthened investor confidence.
Salesforce (CRM) shares rose approximately 13% after the release of its results. The company's adjusted earnings more than doubled, reaching $5.90 per share, largely driven by investment income. Net revenue came in at $11.35 billion versus the forecast of $11.32 billion. If this momentum holds, Salesforce could add about 160 points to the Dow Jones Industrial Average during trading on Thursday.
CrowdStrike (CRWD) gained about 10% on the back of beating expectations on both revenue and earnings per share. The company's third-quarter guidance matched estimates on earnings and came in higher on revenue. Shares of Veeva Systems (VEEV), a software developer for the pharmaceutical industry, rose approximately 7%, also beating analyst forecasts on both key metrics.
Other notable moves and one laggard
Among the less prominent but interesting events was a 4% rise in Agilent Technologies (A) shares, matching Nvidia's movement. The company's third-quarter revenue totaled $1.88 billion, exceeding the FactSet forecast of $1.84 billion. Shares of Everpure (formerly Pure Storage) rose approximately 2%: adjusted earnings reached $0.70 per share on revenue of $1.19 billion, which also came in better than expected.
At the same time, Urban Outfitters (URBN) shares fell approximately 5%, despite results matching analyst expectations. The company's earnings did not include a one-time duty refund, which was likely the reason for investor disappointment.
My view: The current dynamics of the earnings season highlight an important shift in market sentiment. Investors are becoming increasingly selective in their assessment of companies, favoring those that not only show strong numbers but also provide compelling long-term guidance. Nvidia remains the undisputed leader in its niche, but the market appears to have already priced in a significant portion of future growth. Under such conditions, even excellent results may not trigger the expected reaction if they are not accompanied by surprises in guidance. The key question for Thursday is whether the growth leaders can hold their achieved levels during the main trading session.