How Microsoft's earnings juiced Nvidia's stock
Add Axios as your preferred source to
see more of our stories on Google.
Nvidia stock was in something of a short-term slump on Tuesday, closing the day at $103.73, down 26% from the all-time high set in June. Then Microsoft released its quarterly earnings.
The big picture: Microsoft announced a larger-than-expected $19 billion of capital expenditures in Q2 — that's $300 million per business day — and said "nearly all" of that was spent on building cloud and AI infrastructure.
- Nvidia shares immediately surged, on the basis that the chipmaker is surely the prime beneficiary of Microsoft's spending spree.
Between the lines: Microsoft and Nvidia have been the joint avatars of the AI stock-market boom over the past year. Since the beginning of 2023, Microsoft stock is up 74%, while Nvidia is up 701%.
The bottom line: Wednesday's market action is a sign that the market is beginning to concentrate on cash flow and that the fortunes of the two companies might no longer be entirely aligned.
