Asia Shares Bounce but Nvidia's Results Fail to Impress: Market Wrap

 

# Asia Shares Bounce but Nvidia's Results Fail to Impress: Market Wrap

You know that feeling when you've been waiting for something all week, and when it finally happens, it's just... fine?

That's the vibe in Asian markets this morning.

Nvidia delivered another monster quarter—revenue up 73%, guidance above expectations, the usual jaw-dropping numbers. But for a stock that's already priced for perfection, "fine" isn't enough. The reaction was muted. Futures slipped. And now Asia is left to pick up the pieces .

Let me walk you through what happened overnight, how Asian markets are responding, and what it all means for your portfolio.

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## The Short Version

**What happened overnight:** Nvidia reported Q4 earnings after the U.S. close. Revenue hit $68.13 billion, beating estimates. Guidance for next quarter was also above expectations at around $78 billion. But the stock barely moved—up a bit, down a bit, ending essentially flat .

**Why the muted reaction:** Nvidia's CFO said they're assuming "no Data Center compute revenue from China" going forward, and warned that Chinese competitors are "making progress." The company also said it has enough inventory to meet demand for the full year, removing the "scarcity" narrative that's been boosting the stock .

**How Asia is reacting:** Mixed. Japan's Nikkei is up about 0.5%. South Korea's KOSPI is flat to slightly higher. Hong Kong futures are pointing to a modest gain. China's markets are also up slightly. But the enthusiasm is tempered .

**The bigger picture:** The AI trade isn't dead. But it's maturing. And markets are starting to realize that even the best companies face headwinds .

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## Nvidia's Quarter: By the Numbers

Let's start with the raw data, because it's still impressive by any normal standard.

**Table 1: Nvidia Q4 Earnings vs. Expectations**

| **Metric** | **Actual** | **Expected** | **Beat** |

| :--- | :--- | :--- | :--- |

| Revenue | $68.13 billion | $65.9 billion | +3.4% |

| EPS | ~$1.53 | ~$1.50 | +2% |

| Data Center Revenue | Up 75% YoY | N/A | Massive |

| Shareholder Returns | $41.1 billion | N/A | N/A |

*Sources: *

**Guidance for next quarter:**

- Expected revenue: ~$78 billion (plus or minus 2%)

- Wall Street was looking for: ~$72.8 billion

- Beat: About 7% above expectations 

By any historical standard, these numbers are absurd. Revenue up 73% year-over-year. Guidance that suggests growth is actually accelerating. A company that's now returning more than $40 billion to shareholders in buybacks and dividends .

**So why didn't the stock pop?**

Two reasons.

**First, China.** CFO Colette Kress said on the call: "We are not assuming any Data Center compute revenue from China in our outlook" . That's a massive chunk of the market, completely gone due to export restrictions. And she warned that Chinese competitors are "making progress," bolstered by recent IPOs, and "have the potential to disrupt the world order in AI" .

**Second, inventory.** Kress also said the company has enough inventory to meet demand for "at least the full year." Gene Muster at Deepwater Management explained why that matters: "When you talk about being in supply-demand equilibrium, it does remove this hopeful, wishful dynamic... there is a little bit of a psychological headwind to being in equilibrium" .

In other words: scarcity is good for stock prices. Abundance is not. If Nvidia finally has enough chips to meet demand, the narrative shifts from "they can't make enough" to "how much longer will this last?"

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## How Asia Is Trading

Asian markets opened mixed Thursday, with investors digesting Nvidia's results and looking for direction.

**Table 2: Asia Pacific Morning Moves**

| **Index** | **Change** | **Notes** |

| :--- | :--- | :--- |

| Japan Nikkei 225 | +0.5% | Tech stocks lead |

| South Korea KOSPI | Flat | Samsung, SK Hynix mixed |

| Australia S&P/ASX 200 | +0.3% | Miners up, tech flat |

| Hong Kong Hang Seng | Futures +0.2% | Waiting for open |

| China CSI 300 | +0.2% | Modest gains |

*Sources: *

**The Japan story:** The Nikkei is getting a modest boost from tech stocks, which are tracking Nvidia's after-hours performance. But the gains are limited—investors are taking a "wait and see" approach .

**The Korea story:** South Korea's market is flat. Samsung and SK Hynix, two of the biggest chipmakers in the world, are seen as proxies for the AI trade. If Nvidia's results didn't excite investors, these stocks aren't getting a boost either .

**The China story:** Chinese markets are up slightly, but there's an undercurrent of concern. If U.S. export restrictions are permanently cutting Nvidia off from China, that's bad for Chinese AI development—but potentially good for domestic chipmakers. The net effect is unclear .

**The Australia story:** The ASX is up modestly, led by mining stocks. Tech is flat. Energy is strong .

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## What the Analysts Are Saying

Despite the muted stock reaction, Wall Street remains bullish on Nvidia.

**Table 3: Analyst Ratings and Targets**

| **Firm** | **Analyst** | **Rating** | **Target** |

| :--- | :--- | :--- | :--- |

| Jefferies | Blayne Curtis | Buy | $275 |

| CLSA/里昂 | N/A | 高度确信跑赢大市 | $300 |

| Consensus (63 analysts) | N/A | Buy | $254.54 |

*Sources: *

**CLSA's take:** Based on 32x 2028 EPS estimates, the $300 target implies significant upside. They note that Nvidia's valuation (26x forward earnings) doesn't reflect its "core role in the AI revolution." With at least 80% share of the AI accelerator market, pricing power, and growing demand from knowledge work, entertainment, robotics, and autonomous vehicles, the runway is long .

**Jefferies:** Maintained Buy with $275 target .

**The China concern:** Analysts are split on how seriously to take the China threat. Some think it's a long-term issue that will take years to play out. Others worry that Chinese competitors could disrupt the market faster than expected .

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## The Broader Market Context

### What Happened in the U.S.

Before Nvidia reported, U.S. markets had a strong session.

**Table 4: Wednesday's U.S. Market Close**

| **Index** | **Change** | **Close** |

| :--- | :--- | :--- |

| Dow Jones | +307 points (+0.6%) | ~49,500 |

| S&P 500 | +0.8% | ~6,935 |

| Nasdaq | +1.3% | ~23,120 |

*Sources: *

**The leaders:** Tech, financials, and communication services led the way. Real estate and consumer staples lagged .

**The software bounce:** Salesforce was up 3.4% during the regular session, bouncing back from a brutal start to the year (down 30% year-to-date) .

**The winners:** Albemarle (+8.3%), Western Digital (+6.8%), Netflix (+4.8%) .

**The losers:** MercadoLibre (-7.95%), Workday (-4.25%), Kraft Heinz (-2.3%) .

### Other Overnight Earnings

Nvidia wasn't the only game in town.

**Salesforce (CRM)** reported earnings that beat expectations for the quarter but guided lower for fiscal 2027. The stock dropped about 5% in after-hours trading .

The company's forecast for annual revenue came in at $45.8 billion to $46.2 billion, with the midpoint slightly below Wall Street's $46.1 billion estimate .

**Why it matters:** Salesforce is a bellwether for enterprise software. If they're seeing softness, it suggests that businesses are still cautious about spending, and that AI disruption fears might be real.

**Other movers:**

- **Trade Desk (TTD):** Down 16% after-hours on weak guidance 

- **C3.ai (AI):** Down 23% after-hours on weak forecast 

- **IonQ (IONQ):** Up 7% after-hours on strong guidance 

### The Fed and Rates

**Rate cut odds:** The market now sees only a 50% chance of a rate cut by June—the lowest level this year. The probability of three cuts in 2026 has "almost disappeared" .

**Fed speak:** Boston Fed President Susan Collins said recent data shows labor market improvement but persistent inflation risks, so rates will likely stay unchanged "for a period of time" .

Fed Governor Lisa Cook offered a fascinating warning: the Fed's policy might not be able to address unemployment caused by AI disruption. But she also noted that if AI boosts productivity, growth could stay strong .

### Geopolitics: Iran and Tariffs

**Iran talks:** The U.S. and Iran are scheduled for another round of nuclear talks in Geneva. The U.S. just imposed sanctions on more than 30 entities supporting Iranian oil and weapons sales, cranking up the pressure .

**Tariffs:** President Trump moved ahead with a 10% duty on global imports and signaled a directive to raise it to 15% "where appropriate" . The Supreme Court struck down his earlier tariff push, but he's finding new legal avenues.

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## What This Means for You

### If You Own Nvidia Stock

Don't panic. The muted reaction to earnings isn't a disaster—it's a reflection of how high expectations have gotten. Nvidia is still the dominant player in the most important technology market on earth. The China concerns are real, but they're also priced in.

### If You're Thinking About Buying

This might be your moment. Nvidia's stock has been range-bound for months. If you believe the AI buildout is still in early innings—and all the evidence says it is—then a pullback on China news could be a buying opportunity.

But be realistic. Nvidia is a $4.7 trillion company. It's not going to 10x from here. The days of 100% annual returns are probably over.

### If You're in Tech Stocks Generally

Nvidia's results are good for the whole sector. They confirm that the spending is real, that the demand is there, and that the AI revolution isn't slowing down.

But pay attention to the software names. Salesforce's weak guidance suggests that not every tech company is benefiting equally. The "SaaSpocalypse" fears might be overblown, but they're not completely unfounded.

### If You're Investing in Asia

The AI trade isn't just about U.S. stocks. Samsung, SK Hynix, TSMC, and other Asian chipmakers are critical parts of the supply chain. If Nvidia's results are any indication, demand for their products will remain strong.

But the China situation adds complexity. If U.S. restrictions push China to develop its own chip industry, that could create new competitors—but also new opportunities for companies that can navigate both markets.

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## Frequently Asked Questions

**Q: Did Nvidia beat earnings expectations?**

A: Yes. Revenue of $68.13 billion topped estimates of $65.9 billion, and guidance of ~$78 billion beat expectations of $72.8 billion .

**Q: Why did the stock barely move?**

A: Two main reasons. First, Nvidia's CFO said they're assuming zero China data center revenue going forward, which spooked investors. Second, the company said it has enough inventory to meet demand for the full year, which removes the "scarcity" narrative that's been boosting the stock .

**Q: How are Asian markets reacting?**

A: Mixed. Japan's Nikkei is up about 0.5%. South Korea's KOSPI is flat. Hong Kong and China are up modestly. But the enthusiasm is tempered .

**Q: What's happening with China and Nvidia?**

A: Export restrictions mean Nvidia can't sell its most advanced chips to China. CFO Colette Kress said the company is "not assuming any Data Center compute revenue from China" in its outlook. She also warned that Chinese competitors are "making progress" and could disrupt the global AI market .

**Q: What about Salesforce?**

A: Salesforce beat Q4 expectations but guided lower for fiscal 2027, causing the stock to drop about 5% after-hours. It's a reminder that not all tech companies are benefiting equally from the AI boom .

**Q: Are interest rates going down anytime soon?**

A: Probably not. The market now sees only a 50% chance of a rate cut by June, and the probability of three cuts this year has "almost disappeared" .

**Q: What should I watch next?**

A: Keep an eye on: 1) The Iran nuclear talks in Geneva, 2) Trump's tariff announcements, 3) Fed comments on rates, and 4) How software stocks respond to Salesforce's guidance.

**Q: Should I buy Nvidia now?**

A: I can't give investment advice, but here's what the analysts are saying: Jefferies has a Buy with a $275 target, CLSA has a "highly confident outperform" with a $300 target, and the consensus of 63 analysts is Buy with a $254.54 target .

**Q: What's the long-term outlook for AI chips?**

A: Jensen Huang, Nvidia's CEO, says the next wave—"agentic AI"—will require 10 to 100 times more compute than current generative AI. If he's right, demand for chips could stay strong for years .

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## The Bottom Line

Here's what I keep coming back to.

Nvidia just reported one of the most anticipated earnings in market history. They delivered—by any objective measure, they absolutely crushed it.

And the stock barely moved.

That tells you something about where we are in this cycle. The easy money has been made. The AI trade is no longer a secret. Nvidia is now a $4.7 trillion company that has to justify its valuation every single quarter.

**The good news:** The underlying fundamentals are still rock solid. The hyperscalers are spending hundreds of billions on AI infrastructure. Demand isn't slowing. And Nvidia is still the dominant player.

**The caution:** Competition is coming. China is building its own chips. AMD is gaining ground. And the market is starting to pay attention to these risks in a way it didn't a year ago.

For Asian markets, Nvidia's results are a reminder that the AI story is global. The chips are made in Taiwan and South Korea. The supply chain stretches across the region. And the demand is coming from everywhere.

But the muted reaction also shows that markets are getting picky. "Good enough" isn't enough anymore. Companies need to deliver something special to move the needle.

Nvidia delivered special. It's just that special is now the new normal.

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