NEW YORK — S&P 500 futures dropped 0.5 percent in overnight trading after Nvidia's earnings guidance fell short of expectations for sustained AI infrastructure spending. The semiconductor giant's stock closed at $223.47, up 1.3 percent, but after-hours selling accelerated as analysts digested weaker forward projections.
Nvidia reported strong quarterly revenue but signaled a slower ramp in data center spending over the next two quarters compared to previous periods. Major cloud service providers—key Nvidia customers—are moderating immediate capital expenditure plans, contrasting with earlier expectations for aggressive expansion through 2025.
The guidance miss threatens the S&P 500's trajectory toward 7,500, a level many analysts tied directly to AI infrastructure buildout. Nvidia's H100 GPU sales have driven much of the sector's growth, making its projections a bellwether for the entire technology ecosystem.
The Nasdaq, which closed at 26,270, faces particular pressure given Nvidia's index weighting. Microsoft, which closed at $421.06, and Alphabet, at $388.91, both depend on continued AI infrastructure investment for their cloud service expansion plans.
Goldman Sachs had projected strong AI-driven earnings across the tech sector for the second half of 2025. Nvidia's revised outlook forces recalculation of these growth models across semiconductor and enterprise software industries.
Traders will monitor commentary from Nvidia management and revised price targets from sell-side analysts. The market reaction suggests even robust earnings require stronger forward guidance to sustain current valuations for AI leaders.
