CNBC Daily Open: Are investors missing the Nvidia forest for the AI tree?

CNBC Daily Open: Are investors missing the Nvidia forest for the AI tree?


An Nvidia chip is seen through a magnifying glass in Beijing, China, on August 1, 2025.

Vcg | Visual China Group | Getty Images

Market watchers might be perplexed by the seemingly contradictory moves of Nvidia’s shares in extended trading.

The company beat expectations for its second-quarter results, and its forward revenue guidance also surpassed expectations. A stock buyback was also announced, but the stock fell.

The reason? Data center revenue, which serves as a proxy for the company’s AI prospects, came up short of estimates.

Nvidia’s growth in recent years has been fueled by its data center business, which focuses on graphics processors, or GPUs, and related products that link and scale them for large deployments. Revenue from the division rose 56% from a year earlier to $41.1 billion, slightly below the $41.34 billion estimate from StreetAccount.

However, it is important to note that the company is not performing poorly. In fact, the chipmaker has topped earnings estimates in 11 of the past 12 quarters, but its shares fell after results on four of those occasions, according to FactSet.

Could investors then, be expecting too much from the chipmaker?

Remember, Nvidia still has other engines to rely on, such as its gaming division. In fact, before the AI boom, Nvidia’s gaming division was its largest revenue driver, and the firm was more widely known among computer enthusiasts for its graphics cards, which they would install in their own rigs.

Trees, forests and the Nvidia logo might all be green, but investors shouldn’t miss the Nvidia forest for the AI tree.

What you need to know today

Nvidia posts results beat. The tech giant reported better-than-expected earnings and revenue on Wednesday, and said sales growth this quarter will remain above 50%. However, the stock slipped in extended trading, as data center revenue fell short of estimates for the second straight period.

S&P notches fresh closing high. The broad market index gained 0.24% at the end of the session and reached a new closing high of 6,481.40 as all three major U.S. indexes climbed on Wednesday ahead of Nvidia’s earnings. Over in Europe, the pan-European Stoxx 600 inched up 0.1% as markets remained mixed.

Canada Goose jumps. New York-listed shares of Canada Goose rose more than 15% Wednesday after a CNBC report that the winter-clothing maker’s controlling shareholder, Bain Capital, has drawn interest in taking the company private.

Fed continues to stress independence. New York Federal Reserve President John Williams on Wednesday stressed the importance of central bank independence as President Donald Trump looks to exert control over monetary policy. This follows pressure from Trump on the central bank’s leadership, including an attack on Fed Chair Jerome Powell and attempting to fire Fed Governor Lisa Cook.

[PRO] Pros assess if TSMC is a “smart” buy. Nvidia CEO Jensen Huang’s said last week that investors buying TSMC stock would be “very smart.” Analysts from Morningstar, Macquarie and GFM Asset Management share their thoughts with CNBC.

And finally…

Taylor Swift celebrates with Travis Kelce #87 of the Kansas City Chiefs after defeating the Buffalo Bills 32-29 in the AFC Championship Game at GEHA Field at Arrowhead Stadium on Jan. 26, 2025 in Kansas City, Missouri.

Jamie Squire | Getty Images



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