• Nvidia shares fell in U.S. premarket trading on Wednesday after the chipmaker reported results that beat both the top and bottom lines.
• Despite nearly doubling revenue year-over-year, Nvidia’s third-quarter results show a slowdown compared to previous quarters.
• Analysts are looking forward to the launch of Nvidia’s next-generation Blackwell chip, which CEO Jensen Huang said is in greater demand than units the company can supply.

Nvidia shares fell in US premarket trading on Thursday after the tech giant’s third-quarter results failed to impress investors.

Shares of the chipmaker fell 3.21% around 5:03 a.m. ET following Nvidia’s quarterly earnings release Wednesday, which outperformed on both the top and bottom lines.

Revenue came in at $35.08 billion, up 94% year-over-year and exceeding the $33.16 billion forecast by LSEG analysts. Adjusted earnings per share amounted to 81 cents, also above analysts’ expectations.

Other chip makers fell due to the market reaction to Nvidia’s third-quarter results. Shares of Intel, Qualcomm and Micron Technology all lost 1% or more in value, while AMD fell 0.6%.

The slump at Nvidia also had a domino effect on European semiconductor companies. ASML, a major supplier of chip equipment, fell 0.9%, while Dutch chip company ASMI fell 0.5%. Chipmakers BE Semiconductor, STMicroelectronics and Infineon fell 0.8%, 0.7 and 0.6% respectively.

Several notable chip names were also in negative territory in Asia. TSMC, which makes Nvidia’s powerful graphics processing units, fell as much as 1.5%. Contract electronics manufacturer Foxconn fell 1.9%.

Why are Nvidia shares falling?

Nvidia has largely cornered the market on the powerful chips that power the world’s most advanced artificial intelligence models, such as OpenAI’s ChatGPT.

Despite nearly doubling year-over-year revenue, Nvidia’s third-quarter results showed a slowdown from previous quarters. Nvidia previously reported growth of 122% in the second quarter, 262% in the first quarter and 265% in the fourth quarter of 2023.

Derren Nathan, head of equity research at Hargreaves Lansdown, said in an emailed commentary on Wednesday that the dip in Nvidia’s share price “suggests that even excellent shares may not be enough for some investors”, adding that he expects the shares will recover once markets open.

“NVIDIA has been generating great returns for shareholders for many years, and at this point it’s quite difficult to see any major holes in the investment case,” Nathan added.

Analysts are looking forward to the highly anticipated launch of Nvidia’s next-generation chip called Blackwell. During the company’s earnings call, CEO Jensen Huang said demand for the chip is outpacing supply.

– CNBC’s Kif Leswing contributed to this report