What happened
Shares of chips giant Nvidia (NVDA -3.33%) slipped in late morning trading on Wednesday, down 2.6% as of 11:30 a.m. ET despite modestly positive news in the semiconductor space.
There was no bad news for Nvidia specifically -- but the good news wasn't all that great.
Image source: Getty Images.
So what
Take semiconductors peer company Micron (MU -0.60%) for example. Micron reported a big earnings beat for its second quarter of fiscal 2022 last night, and guided investors to expect another beat in the third quarter. Net income at the maker of computer memory roughly quadrupled year over year, and sales were up 25%, indicating continued strong demand for semiconductors.
Nevertheless, while Micron improved a lot year over year, it didn't show a lot of sequential improvement in its results. Sequentially, gross profit margin at Micron grew by only 80 basis points, while operating profit margin declined by 150 basis points. Sequentially, Micron's operating and net profits both declined, as did its per-share earnings -- and all of this may have set some investors to worrying today about where semiconductors are heading in the near term.
Now what
And now consider what's happening at Nvidia itself. As my colleague Chris Neiger noted yesterday, Nvidia just won a target price hike from Tigress Financial, which called Nvidia "the world's leading AI processing provider" and predicted that Nvidia would continue "to expand its leadership position in all areas" of semiconducting, and in data centers in particular.
Nevertheless, all this bullishness was worth to Tigress was an extra $10 in target price, as it hiked Nvidia from $400 to $410. While a move in price target up is certainly better than a move in price target down, as Chris noted yesterday, Tigress' tiny hike simply didn't excite investors very much, and Nvidia struggled to maintain momentum all day long despite stock markets generally rising.
In the context of today's mostly down stock market, with both the S&P 500 and the Nasdaq in the red, it's no huge surprise to see Nvidia stock falling in tandem.
