US technology stocks are falling despite Nvidia, the chipmaker fueling the stock market boom based on artificial intelligence (AI), reporting higher-than-expected profits.

The company, a longtime darling of the US market with stock growth of 150% this year, reported revenue of more than $30 billion in the second quarter, more than double the revenue it achieved in the same period last year.

NvidiaThe key $32.5 billion forecast for current-quarter revenue also beat estimates, but only slightly.

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That may have been why the shares suffered a rare drop in value after an earnings report.

According to Reuters news agency, after-hours trading saw a decline of as much as 6.8%.

That was a continuation of losses of more than 2% during key trading hours on Wednesday.

Several large customers, including Meta and Amazon, were also affected, but for both the red figures were around 1%.

Nvidia, which has 80% of the AI ​​chip market, is being closely watched, with signs that the large investment opportunity in AI is still on a solid upward curve.

Confidence wavered in early August as US data fueled recession fears, leading to a short-lived but strong global stock sell-off causing investors to flock to safe government bonds.

For Nvidia, a recession, while highly unlikely, is a risk to AI demand and therefore to its products.

According to data from LSEG, the outlook and success to date have resulted in a market value of $3.2 trillion.

Shares are up 3,000% since 2019.

But its meteoric rise, which has put Nvidia just behind Apple in market value, has raised fears of a repeat of the dot-com bubble that burst two decades ago.

Technology stocks have outperformed the market and are seen as vulnerable to value versus earnings shocks.

Concerns about a delay in the launch of Nvidia’s upcoming Blackwell chips due to design have contributed to the recent share price swings. Still, the shares have largely held up, as the existing Hopper chips were seen as a way to fill any short-term gaps.

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Nvidia said Wednesday it had already shipped Blackwell pilots to customers and partners, and expected sales to ramp up from the end of the year.

Traders in the US stock options market had expected the earnings report to trigger a price swing of more than $300 billion, even before the earnings figures were released.

However, analysts say the declines in share prices may rather reflect uncertainty over the value question.

Matt Britzman, senior analyst at Hargreaves Lansdown, said of the update: “Nvidia continues to defy gravity, beating expectations for both revenue and earnings for the seventh consecutive quarter. This demonstrates a masterful performance and guidance from Jensen Huang and the Nvidia team.

“But early trading suggests that’s not enough to keep the market happy. It’s less about beating estimates now, markets are expecting them to be shattered and it’s the size of the outperformance today that seems to have disappointed somewhat.”