Stocks Close Lower Ahead of Highly Anticipated Earnings Report from AI Chipmaker Nvidia

Biggest S&P 500 Movers on Wednesday

May 28, 2025 06:57 PM EDT

Decliners

Shares of Cadence Design Systems (CDNS) and Synopsys (SNPS) tumbled 10.7% and 9.6%, respectively, after The Financial Times reported the White House had instructed companies that sell software used to design semiconductors to stop providing their services to Chinese clients.
Shares of water heater and treatment solutions specialist A.O. Smith (AOS) plunged 6.3%. The decline in the stock came after heating, ventilation, and air conditioning giant Lennox International (LII) said it will jump into the water heater market in North America via a joint venture with Aris Water Solutions (ARIS). Analysts at Jefferies expressed concerns about A.O. Smith’s market position in the wake of Lennox’s announcement.
Deckers Outdoor (DECK) shares slipped 4.3% on Wednesday. The stock has seen heavy volatility in recent sessions, tumbling Friday after the parent company of the Ugg and Hoka footwear brands withheld its full-year forecast, citing tariff concerns. Then on Tuesday, it regained ground following the holiday weekend, bolstered by a strong consumer sentiment report and an extended timeline for tariffs on imports from Europe.
Shares of electric utility AES Corp. (AES) dropped 3.7% after Argus Research downgraded the stock to “hold” from “buy.” Analysts pointed to the power generator’s recent earnings report, noting that adjusted earnings per share (EPS) fell sharply year-over-year and came in below consensus forecasts. Although AES could benefit over the long term from the shift to more environmentally friendly power generation, the stock has been under pressure as the renewable energy industry faces an uncertain policy outlook.

Advancers

After posting the sharpest drop in the S&P 500 during the previous session, shares of credit score provider Fair Isaac (FICO) changed course on Wednesday, jumping 7.7% to log the top daily performance in the benchmark index. The stock has been under pressure over the past week following criticism of FICO’s pricing structure by a top federal housing official, who singled out the cost of credit evaluations for potential borrowers as a major contributor to elevated mortgage origination expenses. 
Warner Bros. Discovery (WBD) shares gained 4.9% after reports that David Leavy would exit his role as the chief operating officer of the entertainment giant’s cable news network CNN and return to the parent company. Before helping guide CNN through a transitional period over the past two years, Leavy was employed as WBD’s chief corporate affairs officer. 
Shares of medical device firm Hologic (HOLX) added 2.5% on Wednesday, extending gains posted the prior day following reports that the company had rejected a buyout offer from two private equity firms. Although the take-private deal for the diagnostics equipment maker did not materialize, reports suggested that negotiations could continue.

-Michael Bromberg

Chip Software Stocks Slide on Report of China Sales Curb

May 28, 2025 06:22 PM EDT

Shares of semiconductor software companies sank, weighed down by a report that they had been caught up in the Trump administration’s efforts to hamstring China’s ability to develop sophisticated artificial intelligence. 

The Financial Times on Wednesday reported the White House had instructed companies that sell software used to design semiconductors to stop providing their services to Chinese clients.

Shares of Cadence Design Systems (CDNS) and Synopsys (SNPS) tumbled 10.7% and 9.6%, respectively, on Wednesday. Those companies did not respond to Investopedia’s requests for comment in time for publication.

The report arrived ahead of Nvidia’s (NVDA) report of its latest quarterly financial results, with the chip giant saying it took a substantial financial hit—though smaller than it initially thought—after the White House in early April tightened restrictions on the export of advanced chips to China.

The Trump administration has escalated the Biden administration’s efforts to curb China’s access to cutting-edge semiconductors. Nvidia in particular lost out on some revenue associated with its H20 chips, which it developed specifically to comply with Biden-era restrictions. Competitor Advanced Micro Devices (AMD) estimated it would take an $800 million hit for similar easons.

During the Nvidia earnings call on Wednesday, CEO Jensen Huang said Trump-administration policy that restricts the sale of Nvidia products to China “weakens America’s position.”

Trump earlier this month rescinded Biden’s “AI diffusion rule,” which would have expanded export restrictions and tightened existing controls. The administration says it will eventually issue its own rule to prevent US-made chips from reaching China via other countries.

-Colin Laidley

Nvidia Shares Jump in Extended Trading as Revenue Soars

May 28, 2025 05:15 PM EDT

Nvidia reported fiscal first-quarter sales that topped analysts’ expectations, though earnings missed as the chipmaker took a hit from new export curbs.

The chipmaker reported adjusted earnings of 81 cents per share on revenue that jumped 69% to a record $44.06 billion. Nvidia said that without the charge tied to limits on sales of its H20 chip to China, it would have reported EPS of 96 cents, above estimates.

Nvidia’s data center sales hit a quarterly record of $39.1 billion in the first quarter, up 73% from a year ago, as Big Tech firms work to raise their AI capacity.

In recent earnings calls, several of Nvidia’s Big Tech clients, including Microsoft (MSFT), Meta (META), Amazon (AMZN) and Google parent Alphabet (GOOGL), stood by their plans to spend on AI infrastructure this year.

Nvidia told investors to expect fiscal second-quarter revenue of $45 billion, plus or minus 2%, reflecting a roughly $8 billion hit due to H20 export limitations.

“Global demand for NVIDIA’s AI infrastructure is incredibly strong,” CEO Jensen Huang said in a press release. “AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate.”

Huang in the release said the company’s Blackwell NVL72 AI supercomputer is “in full-scale production across system makers and cloud service providers.”

Nvidia shares were up more than 5% in recent after-hours trading. If the gains are sustained, the company is poised to overtake Microsoft as the world’s most valuable by market capitalization.

Read our full Nvidia earnings coverage here.

Dick’s Stock Rises as Retailer Tops Estimates, Affirms Outlook

May 28, 2025 04:26 PM EDT

Dick’s Sporting Goods (DKS) shares rose Wednesday after the retailer reported better first-quarter results than analysts had expected, weeks after shaking up the retail landscape with its acquisition of Foot Locker (FL).

The company reported adjusted earnings per share (EPS) of $3.37 on net sales that rose 5% year-over-year to $3.18. Analysts polled by Visible Alpha had projected $3.28 and $3.15 billion, respectively. The adjusted EPS figure and the reported comparable store sales growth 4.5% were in line with the preliminary results Dick’s released May 15 when it announced the roughly $2.4 billion Foot Locker deal.

The company kept its full-year outlook steady, but noted that it does not include costs or benefits from the Foot Locker acquisition, which is expected to close in the second half of 2025. Last quarter, Dick’s said it expected 2025 sales between $13.6 billion and $13.9 billion with a 1% to 3% comparable store sales gain, and EPS between $13.80 and $14.40.

CEO Lauren Hobart said affirming the full-year outlook “reflects our strong start to the year and confidence in our strategies and operational strength while still acknowledging the dynamic macroeconomic environment.”

Dick’s shares rose 1.6% on Wednesday, The stock has lost more than a fifth of its value since the start of 2025.

-Aaron McDade

These Stocks Could Post Big Moves After Nvidia Earnings

May 28, 2025 03:40 PM EDT

Nvidia’s earnings report is a blockbuster, market-moving event for Wall Street. Investors parse the results for any sign that AI demand or investment is waning, making the report a catalyst for AI infrastructure stocks. 

Most of these AI stocks are currently trading at or above their price heading into Nvidia’s last earnings report at the end of February. Those results weighed heavily on the majority of AI beneficiaries. Shares of server maker Super Micro Computer (SMCI) and nuclear energy provider Vistra (VST) outpaced Nvidia’s (NVDA) 8.5% decline the day after its last report, tumbling 16% and 12%, respectively. Constellation Energy (CEG), also a nuclear power provider, slumped about 7.5%. 

Nvidia’s position as the world’s largest semiconductor company has made it something of a bellwether for the entire industry. The PHLX Semiconductor Index (SOX) tumbled more than 6% after Nvidia’s last report, its biggest decline since January’s DeepSeek panic caused the index to nosedive. Major Nvidia competitors Broadcom (AVGO) and Advanced Micro Devices (AMD) tumbled 7% and 5%, respectively. Chip fabrication services provider Lam Research (LRCX) and memory chip maker Micron (MU) also closed sharply lower. 

The companies that supply data centers with essential networking equipment also tend to move on AI demand signals parsed from Nvidia’s earnings. Shares of Arista Networks (ANET) slid 5% following Nvidia’s February report, while fiber optic technology provider Corning (GLW) shed 2% and network provider Lumen Technologies (LUMN) dropped 4%. 

Granted, stocks within the AI ecosystem don’t always move in tandem. Nvidia shares soared more than 9% on its earnings report one year ago, but the boost its results lent to other AI infrastructure stocks fizzled out before the day’s end. Supermicro shares rose as much as 11% that day before sliding to close 3% lower. 

-Colin Laidley

Trump Administration Axes Warning on Crypto in 401(k)s

May 28, 2025 02:20 PM EDT

The Department of Labor threw Biden-era crypto caution to the wind Wednesday, rescinding guidance that had called for employers to use “extreme caution” when including cryptocurrency-based options in retirement plans.

The department said Wednesday it was withdrawing the guidance established in 2022 discouraging fiduciaries from including crypto options for 401(k) retirement plans.

“The Biden administration’s Department of Labor made a choice to put their thumb on the scale,” Secretary of Labor Lori Chavez-DeRemer said in a press release. “We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats.”

The old guidance had highlighted the many risks of buying and holding cryptocurrencies, including extremely volatile valuations, exposure to fraud, and difficulties with record keeping, advising fiduciaries to think twice before including any crypto options in retirement plans offered to employees. Fiduciaries are required by law to act in the best interests of their clients.

Many fiduciaries will likely still steer clear of crypto in their clients’ retirement accounts, said Knute Rostad, president of the Institute for the Fiduciary Standard, a nonprofit group that advocates fiduciary advisors. However, some may see the DOL’s change as an all-clear to put riskier digital assets into workers’ 401(k)s.

“The cautionary guidance provided by the department in the prior administration was very appropriate to reflect the purpose of the retirement account, and so it could be viewed like a blinking yellow caution light,” Rostad said. “That caution light has been removed and has been replaced by a bright green light that gives ‘permission’ to go ahead and use cryptos in these accounts.”

Trump has been far more friendly to cryptocurrencies in public policy than his predecessor. As president, He has ordered the creation of a “strategic cryptocurrency reserve,” and the SEC has softened its stance on crypto under his presidency.

Trump has also been open to crypto in his personal business dealings. He and his wife, Melania, launched their own cryptocurrencies before his 2025 inauguration, and his media company announced plans this week to buy billions worth of Bitcoin.

-Diccon Hyatt

Macy’s Earnings Top Estimates But Retailer Warns About Tariffs

May 28, 2025 01:38 PM EDT

Macy’s (M) shares rose Wednesday as the biggest U.S. department store chain’s better-than-anticipated profit offset warnings about the potential impact of tariffs, which the company plans to address with some price hikes.

Macy’s reported first-quarter adjusted earnings per share of $0.16, a penny more than the average estimate of analysts surveyed by Visible Alpha. Sales that fell 5% year-over-year to $4.60 billion were short of forecasts, although the same-store sales decline of 2.0% on an owned basis was smaller than expected. 

Sales at its namesake stores dropped 6.5% inclusive of store closures, but they were 2.6% higher at Bloomingdale’s and up 0.8% at Bluemercury.

Looking ahead, the company said that because of “initial and current tariffs; some moderation in consumer discretionary spending; and a heightened competitive promotional landscape,” it was lowering its full-year adjusted EPS outlook to $1.60 to $2.00 from the earlier $2.05 to $2.25.

According to a transcript provided by AlphaSense, CEO Tony Spring said on the earnings call that Macy’s is resilient, and has “successfully navigated macro and geopolitical uncertainty in the past, and we will do so again.” Spring added that among the steps the retailer plans to take is “strategic pricing decisions, being mindful of the price value relationship between our market brands and private brands and the broader marketplace.” However, Spring noted that Macy’s is not “just broadly increasing price.”

Macy’s shares were up nearly 2% in recent trading. The stock has lost about 28% of its value so far this year.

-Bill McColl

Okta Shares Sink as Company Points to Economic Uncertainty

May 28, 2025 01:04 PM EDT

Okta (OKTA) shares plunged Wednesday, a day after the identification software provider didn’t raise its full-year guidance because of economic uncertainty.

The company said in looking ahead, it was now “factoring in potential risks related to the uncertain economic environment for the remainder of FY26.”

In the conference call with analysts, a transcript of which was provided by AlphaSense, CFO Brett Tighe explained that Okta’s net revenue retention is facing “a little bit of headwind,” which the company believes will last through the first half of the fiscal year.

The outlook offset better-than-expected fiscal first-quarter results. Okta reported adjusted earnings per share of $0.86, with revenue up 12% year-over-year to $688.0 million. Both exceeded Visible Alpha forecasts. 

Okta shares were down 13% in recent trading. Even with today’s decline, the stock has gained nearly 40% since the start of 2025.

-Bill McColl

GameStop Slides After Disclosure of Bitcoin Purchase

May 28, 2025 12:21 PM EDT

GameStop (GME) shares fell Wednesday after the video game retailer disclosed the purchase of 4,710 bitcoin.

In a release early Wednesday, the company did not disclose when the purchase was made, at what price the bitcoin was purchased, or whether it was acquired through one or multiple transactions. At its current prices, the bitcoin that GameStop recently purchased is worth north of $500 million.

The retailer added bitcoin to its official corporate investment policy in March, following months of reports and social media posts fueling speculation that GameStop was considering investing in bitcoin. After adding the cryptocurrency to its policy, GameStop said it was planning to issue $1.3 billion in convertible bonds for “general corporate purposes,” including buying bitcoin.

In its annual report issued last month, GameStop cautioned investors that it would be subject to the risks that come with investing in Bitcoin and cryptocurrency at large, namely volatile price swings and potential regulatory shifts. The company did not disclose any bitcoin ownership at the time.

After rising in premarket trading following the news, GameStop shares were down 10% in recent trading as the price of bitcoin retreated.

-Aaron McDade

Abercrombie & Fitch Stock Soars After Earnings

May 28, 2025 10:56 AM EDT

Abercrombie & Fitch (ANF) shares surged more than 20% Wednesday morning after the apparel retailer reported better first-quarter results than analysts had expected.

The company reported earnings per share of $1.59 on sales that grew 8% year-over-year to a record $1.10 billion. Analysts surveyed by Visible Alpha had forecast $1.41 and $1.06 billion, respectively.

Comparable sales rose 4%, well above the 2.3% growth that analysts had projected. Sales grew across all three of the company’s geographic regions, while a 4% drop in sales at the Abercrombie brand was offset by a 22% jump at Hollister.

Abercrombie & Fitch raised the top end of its full-year sales growth forecast to 3% to 6% growth from the prior 3% to 5% range. The retailer lowered its projected EPS range to $9.50 to $10.50 from $10.40 to $11.40 previously. The company said the new outlook “assumes approximately $50 million of tariff expense, or 100 basis points as a percent of net sales.”

The retailer forecasts second-quarter sales growth of 3% to 5% and EPS of $2.10 to $2.30. Visible Alpha consensus calls for sales growth of 4.1% and EPS of $2.56.

Shares were up 23% in recent trading. They entered Wednesday down nearly 50% since the start of the year.

-Aaron McDade

Tesla Levels to Watch After Stock’s Latest Surge

May 28, 2025 10:46 AM EDT

Tesla (TSLA) shares moved slightly lower this morning, giving back some of the big gains posted Tuesday after CEO Elon Musk said he is focusing more of his attention on running the EV maker.

“Back to spending 24/7 at work and sleeping in conference/server/factory rooms,” Musk posted on his X social media platform on Saturday. 

Tesla shares fell sharply between mid-December and early April amid concerns that Musk was too focused on his work leading the U.S. government’s cost-cutting department, DOGE. However, the stock has rebounded since Musk told investors last month that he would soon start spending more time at Tesla. While the shares are still down about 10% since the start of the year, they have surged more than 60% from their early-April low.

The stock was down 0.4% at around $361.50 in recent trading after surging 7% yesterday to its highest level since early February.

After climbing above a triple bottom formation and the 200-day moving average (MA), Tesla shares trended higher before consolidating in pennant, a chart pattern that signals a continuation of the stock’s uptrend. Indeed, the price staged a breakout above the pennant in Tuesday’s trading session, setting the stage for a new move higher. 

It’s worth noting the relative strength index confirms bullish price momentum, though the indicator has moved into overbought territory, increasing the chances of short-term profit-taking.

Investors should watch major overhead areas on Tesla’s chart around $430 and $489, while also monitoring key support levels near $325 and $289.

Read the full technical analysis piece here.

-Timothy Smith

Big Nvidia Stock Price Move Expected After Earnings

May 28, 2025 09:47 AM EDT

Shares of Nvidia (NVDA), the second-most valuable company in the world, rose in early trading Wednesday ahead of the scheduled release of the AI chip giant’s earnings report after the closing bell.

Nvidia stock is expected to move about 6% in either direction by the end of the week, according to an analysis of options pricing data. That would put Nvidia’s share price at either $143.92, a 4-month high, or $127.09, a little above where it closed a few weeks ago after the U.S. and China agreed to lower sky-high tariffs on each other’s imports. 

Nvidia shares have risen nearly 25% in the past month, putting the stock up about 1% since the start of the year. Technical analysis suggests bullish momentum is on Nvidia’s side heading into Wednesday’s report.

It’s been a year since Nvidia shares rose on a quarterly report. The stock popped more than 9% in May 2024 after the company blew past earnings expectations  and announced the 10-for-1 stock split that paved the way for it to join the blue-chip Dow Jones Industrial Average. 

Nvidia’s earnings have continued to top estimates since then, but they’ve failed to impress investors. Shares fell after each of Nvidia’s three most recent reports, including nearly 9% in February despite the results containing ample evidence that demand for its AI-enabling chips remained as strong as ever. 

Analysts expect Nvidia to report revenue and earnings growth of about 66% and 40%, respectively, in the most recent quarter. All but two of the Nvidia analysts tracked by Visible Alpha recommend buying the stock. Their average price target is $164.

Nvidia shares were up 0.3% recently at around $136.

-Colin Laidley

Major Index Futures Slightly Higher

May 28, 2025 08:46 AM EDT

Futures tied to the Dow Jones Industrial Average were up fractionally.

S&P 500 futures rose 0.1%.

Nasdaq 100 futures added 0.3%.