Shares in artificial intelligence darling Nvidia initially popped as much as 5% Thursday after the U.S. firm beat expectations in third-quarter results, but later reversed that surge and closed nearly 3% lower.
Wednesday after the bell, Nvidia topped forecasts for revenue, which jumped 62% to $57.01 billion year-on-year, and issued stronger-than-expected fourth-quarter sales guidance.
"There's been a lot of talk about an AI bubble," Nvidia CEO Jensen Huang told investors on an earnings call, as the firm set out its view of the industry. "From our vantage point, we see something very different."
The blowout quarter exceeded even the whisper numbers for the AI chip leader, and while most major analysts commented on and touted the positives, Ross Seymore at Deutsche Bank noted that the shares are "fairly valued."
The firm kept a neutral stance on the stock.
Nvidia's upbeat guidance helped lift investor sentiment around the AI trade, which has weakened in recent sessions amid fears about elevated valuations, debt financing and potential chip depreciation.
The results boosted a slew of stocks across the AI ecosystem immecdiately following the report, including chipmakers Advanced Micro Devices and Broadcom and power infrastructure companies such as Eaton.
Shares of each company sank Thursday as part of the broader market turnaround.