The stock market seems to be on its head right now. On one hand, shares of AI giant Nvidia are down more than 3%, while Dow dog Salesforce is up 5% following quarterly results. The former was the market leader for 2024, up more than 153%. The latter is down 1% for the year. Blame some concerns about Nvidia’s gross margins, despite it otherwise being a blockbuster report. Some on Wall Street also argued that Nvidia missed the so-called whisper number on revenue. Meanwhile, Salesforce raised its full-year guidance. CRM NVDA 1D Mountain CRM vs. NVDA However, traders have not read too much into these one-day moves. Volume has been too light in recent sessions, suggesting that many of the recent transactions have been low to no conviction. Total U.S. volume, which includes all stock transactions on exchanges, was 8.7 billion shares on Tuesday, the lowest since July 3. That figure is expected to deteriorate even further over the next two days leading up to Labor Day weekend, meaning any price movement should be taken with caution. As Andrew Tyler, head of JPMorgan’s U.S. market research, put it in his Thursday note, “Sales continued to decline as we approached the start of pumpkin spice season.” Moreover, Wall Street analysts analyzing the results believe the long-term outlook for both companies remains intact. “We are buying NVDA on the pullback following second-quarter earnings,” wrote Piper Sandler’s Harsh Kumar. “In our view, the fundamentals remain intact.” Bank of America’s Vivek Arya urged investors to “ignore the quarterly noise,” adding that Nvidia offers “unique growth at a very reasonable price.” Meanwhile, Bernstein analyst Mark Moerdler maintained his “underperform” rating on Salesforce. “The question of long-term revenue growth remains unanswered either way. While management is focusing on new growth drivers (Data Cloud and now Agent Force), there are many questions about the sustainability or potential revenue generation of these two growth areas given the competition and numerous unknowns around (return on capital) and value of generative AI capabilities and margin impact,” Moerdler wrote.
Salesforce up and Nvidia down? On Wall Street, it feels like a reverse day
