U.S. stocks slid on Thursday as investors reacted to Nvidia’s latest earnings report, despite another round of headline beats from the AI chip giant. The Nasdaq Composite led the declines, falling roughly 1.8%, while the S&P 500 dropped more than 1% and the Dow Jones Industrial Average slipped about 0.4%.
The pullback shows just how high expectations had climbed around AI trade. Nvidia delivered strong revenue growth and upbeat guidance, but the lack of new detail on future demand drivers, particularly around China and competitive dynamics, left investors wanting more in an increasingly skeptical market.
Market Movers:
- IonQ (IONQ) +23% – Shares surged after the quantum computing firm topped fourth-quarter expectations and issued strong full-year 2026 revenue guidance. Investors looked past projected EBITDA losses, focusing instead on accelerating commercialization and expanding backlog visibility.
- Nutanix (NTNX) +4% – The cloud infrastructure provider rose after reporting a revenue beat and announcing a multiyear AI partnership with AMD. The deal includes a significant equity investment and joint development plans, helping offset concerns about slightly softer forward revenue timing.
- Paramount Skydance (PSKY) +9% – Shares climbed amid reports of a sweetened bid for Warner Bros. Discovery, intensifying a takeover battle that has drawn in multiple media players. The renewed M&A momentum provided relief following recent earnings volatility.
- Salesforce (CRM) +3% – The software giant gained after delivering solid quarterly results and unveiling a $50 billion share repurchase authorization. While full-year guidance was mixed, management emphasized accelerating AI-related traction and strong deal activity.
- C3.ai (AI) -26% – Shares plunged after the company reported a quarterly miss and sharply reduced revenue guidance. Announced job cuts and weaker demand in key geographies fueled concerns about its competitive positioning in an increasingly crowded AI landscape.
- The Trade Desk (TTD) -16% – The ad-tech firm tumbled as a softer first-quarter outlook overshadowed an earnings beat. Margin compression and the absence of full-year guidance added to uncertainty about growth momentum.
- Zoom Communications (ZM) -6% – Shares dipped after issuing slightly weaker-than-expected earnings guidance for the coming quarter. While full-year revenue projections topped estimates, investors focused on near-term pressure.
- Baidu (BIDU) -5% – The Chinese tech giant edged lower following mixed results, with a revenue miss offsetting a profit beat. A newly announced buyback and dividend plan failed to fully reassure investors amid broader AI competition concerns.
Semiconductors Slide in Sympathy
Nvidia’s post-earnings fade reverberated across the semiconductor sector. Major chipmakers, including Broadcom, Micron, Intel, and AMD, traded lower as investors questioned whether AI infrastructure demand can continue growing at its current pace. The iShares Semiconductor ETF fell sharply, reversing part of a strong year-to-date run. While the sector has remained up significantly over the past six months, Thursday’s reaction highlights the growing sensitivity to even minor disappointments.
Macro Signals Offer Little Comfort
On the economic front, weekly jobless claims ticked slightly higher while continuing claims edged down, suggesting a labor market that is stable but losing momentum. Investors are now awaiting Friday’s wholesale inflation data for clearer signals on the Federal Reserve’s next move. At the same time, options activity indicates heightened demand for downside protection. Some strategists view the surge in hedging as a potential contrarian buy signal, but for now it reflects growing fragility in market structure.
Earnings Strength Meets Valuation Reality
Despite one of the stronger aggregate earnings seasons in recent memory, markets have struggled to sustain upward momentum. Analysts note that elevated valuations heading into reporting season left little room for “good but not spectacular” results — particularly in AI-linked names that have driven much of the recent rally. The broader theme remains a reassessment of what constitutes sustainable AI growth versus speculative excess.
Looking Ahead
With Nvidia’s report failing to ignite a fresh leg higher, attention now turns to upcoming inflation data and additional corporate earnings for direction. Investors will be watching closely for signs that AI spending remains durable — or whether cracks are emerging beneath the surface. As volatility returns and sentiment wavers, the next decisive move may depend less on hype and more on tangible evidence of lasting growth.