Why Nvidia Stock Popped After AMD's Earnings
Shares of semiconductor manufacturer Nvidia (NASDAQ: NVDA) closed higher on Wednesday, responding in sympathy to a powerful earnings release from rival Advanced Micro Devices (NASDAQ: AMD) the previous evening.
On Tuesday, AMD wowed Wall Street with a report of $0.63 per share in pro forma profit -- earnings under generally accepted accounting principles (GAAP) were $0.58 per share -- and sales of $3.85 billion. All of those results were considerably higher than Wall Street had predicted. Further encouraging semiconductors investors was the fact that AMD guided for even higher sales in the third quarter ($4.1 billion, "plus or minus $100 million"), and a repeat of the second quarter's robust 48% gross profit margin to boot.
All of which sounds pretty propitious for Nvidia's own earnings release, due out next month. Responding to the bullish sentiment, investors bid up Nvidia stock more than 2% early in the day, and the stock closed Wednesday trading up 1.5%.
Source Fool.com
