Lead: U.S. stock futures dipped Wednesday night after mixed corporate reports from Nvidia and Salesforce altered investor sentiment. Nvidia posted stronger-than-expected fourth-quarter results and modest after-hours gains, while Salesforce fell more than 4% after issuing disappointing fiscal 2027 revenue guidance. The regular session had been positive: the S&P 500 and Nasdaq closed higher, and the Dow rose about 307 points. Traders are now weighing tech earnings and incoming macro data for direction.
Key Takeaways
- Dow futures slipped roughly 0.1% in late trading, while S&P 500 and Nasdaq 100 futures were near flat after-hours.
- Nvidia reported fiscal fourth-quarter revenue of $68.13 billion and adjusted EPS of $1.62, beating LSEG expectations of $66.21 billion and $1.53, respectively.
- Nvidia stock rose about 1.3% in premarket trade despite the beats, as investors debate AI capex sustainability.
- Salesforce dropped over 4% after forecasting weaker fiscal 2027 revenue, pressuring extended Dow futures.
- S&P 500 closed the regular session up 0.8%, Nasdaq Composite gained about 1.3%, and the Dow added ~307 points (0.6%).
- Market attention shifts to earnings from Warner Bros. Discovery, Dell Technologies and CoreWeave, plus weekly jobless claims (Thursday) and January PPI (Friday).
- Trade Desk plunged roughly 16% after first-quarter adjusted EBITDA guidance of ~$195 million missed the ~$223 million FactSet consensus.
- Copper futures rose 0.9% and are set for a seventh consecutive monthly gain; COPX ETF shows double- and triple-digit gains over recent periods.
Background
U.S. equity benchmarks entered Wednesday with momentum after a series of gains in the prior sessions. Investors have been buoyed by resilient corporate profits but remain sensitive to forward guidance, particularly from large-cap tech and enterprise software firms. Over the past several months, fears about AI-driven disruption have produced outsized moves in software and cybersecurity stocks as markets attempt to price a rapidly evolving technology landscape.
Corporate reporting this week features a cross-section of technology and media names, with quarterly results and forward-looking commentary likely to shape sentiment. Market participants frequently react not just to beats and misses, but to commentary on capital spending, customer adoption and subscription dynamics that inform longer-term cash‑flow expectations. Against this earnings backdrop, scheduled macro releases — including jobless claims and producer prices — add short-term volatility risk for equity futures.
Main Event
Nvidia’s fiscal fourth-quarter print beat consensus on both revenue and adjusted earnings, with revenue coming in at $68.13 billion, up 73% year-over-year. The chipmaker’s data-center business remained the primary growth driver and the company provided guidance that beat some analyst models, prompting modest after-hours gains and a 1.3% premarket lift the following morning.
Despite Nvidia’s outperformance, some investors tempered enthusiasm, focusing on the durability and pace of AI infrastructure spending. Portfolio managers and strategists noted the debate has shifted from short-term results to the sustainability and monetization of AI capex, concerns that can limit multiple expansion even amid strong top-line growth.
Salesforce’s after-hours slide of more than 4% followed a fiscal 2027 revenue outlook that fell short of market hopes. The weakness reignited sector-wide anxiety about incumbent software companies’ terminal values as markets fret over AI’s capacity to compress long-term cash flows and valuations. Other software names showed mixed reactions: Oracle and several Magnificent Seven names closed higher in the regular session, while Microsoft gained about 3% on the day.
Analysis & Implications
The juxtaposition of Nvidia’s beat and Salesforce’s cautious outlook underscores how differentiated the AI narrative has become across the tech ecosystem. Hardware and infrastructure vendors capturing direct AI spending can report outsized growth, while software incumbents face questions about how AI will alter pricing, renewal dynamics, and long-term margins. That divergence is prompting active revaluation across subsectors rather than a uniform market move.
Investors are wrestling with three linked uncertainties: the total quantum of AI capital expenditure, the speed of monetization for AI tooling, and whether higher upfront AI investment will erode cash flow margins over time. If AI capex proves more protracted or lumpy than anticipated, firms with capital‑intensive upgrade cycles could see their multiples compress even after near-term revenue beats.
For portfolio construction, this suggests a tilt toward selectivity. Stocks directly enabling AI infrastructure may merit conviction at appropriate valuations, while names whose business models rely on predictable recurring revenue could warrant closer scrutiny of guidance and margin assumptions. Risk management will likely emphasize exposure limits to companies whose long-term cash-flow profiles are most exposed to AI-driven substitution.
Comparison & Data
| Metric | Company / Index | Reported / Move |
|---|---|---|
| Nvidia Q4 revenue | Nvidia | $68.13B (vs $66.21B est.) |
| Nvidia adjusted EPS | Nvidia | $1.62 (vs $1.53 est.) |
| Dow session move | Dow Jones | +307 points (~0.6%) |
| S&P 500 session move | S&P 500 | +0.8% |
| Nasdaq session move | Nasdaq Composite | +1.3% |
| Trade Desk guidance | Trade Desk | Adj. EBITDA ~$195M vs $223M est. |
| Copper futures Feb change | COMEX copper (May) | +0.9% on day; +6.4% YTD |
The table above condenses the key numeric outcomes driving market moves. Nvidia’s beats were clear in both EPS and revenue, yet investor focus on capital‑expenditure durability muted a larger post‑earnings rally. By contrast, guidance misses or cautious outlooks — as in Salesforce and Trade Desk — led to sharp negative reactions even where recent results were not uniformly poor.
Reactions & Quotes
“I think the markets got it wrong,” said Nvidia’s CEO in a television interview, suggesting AI’s impact on software vendors may be overstated by some investors.
Jensen Huang, Nvidia (television interview)
Huang’s remark came amid heightened scrutiny of whether AI tools will displace incumbent software capabilities or mostly augment them. Market participants parsed the comment as a defense of complementary outcomes where specialized software vendors retain a service advantage.
“This isn’t about what’s going to happen to software earnings in the next one to two years,” a U.S. equity strategist noted, emphasizing that the debate centers on terminal valuations rather than immediate revisions.
Abigail Yoder, J.P. Morgan Global Wealth Management (CNBC appearance)
Yoder framed the current market’s struggle as a valuation debate: short-term earnings revisions look constructive, but assigning a long-term multiple requires assumptions about how AI reshapes durable cash flows.
“The debate has shifted away from near-term results and toward the sustainability of AI capex spending,” a portfolio manager said, pointing to concerns about the quantum and monetization of AI investments.
Richard Clode, Janus Henderson Investors (email comment)
Unconfirmed
- Whether AI spending will sustain current growth rates beyond two to three years remains uncertain and subject to company-level adoption patterns.
- Claims that AI will uniformly replace incumbent software providers are speculative; outcome likely varies by product and customer base.
- Short-term share moves do not necessarily predict long-term market leadership; further earnings and guidance are needed to validate trends.
Bottom Line
Nvidia’s strong quarterly results underscore continued demand for AI infrastructure, but the market’s reaction shows that investors are increasingly pricing in the shape and durability of future AI spending rather than only near-term beats. Salesforce’s disappointing revenue outlook highlights how sensitive software valuations are to guidance about long-term cash flow and growth trajectories.
In the days ahead, watch upcoming earnings from Warner Bros. Discovery, Dell Technologies and CoreWeave, along with weekly jobless claims and the January PPI reading, for fresh evidence about demand, pricing power and input-cost trends. For portfolio managers, the episode reinforces the need for selective exposure and closer scrutiny of forward guidance as markets reconcile AI opportunity with valuation risk.