The GraniteShares 2x Long NVDA Daily ETF (NVDL) experienced a sharp 5.04% decline in pre-market trading on Thursday, following NVIDIA's (NVDA) release of its fiscal 2026 second-quarter earnings report. The plunge reflects growing concerns about the sustainability of the AI boom that has been driving NVIDIA's extraordinary growth.
NVIDIA's latest guidance for the current quarter, with expected revenue of approximately $54 billion, fell short of some analysts' more optimistic projections of over $60 billion. This modest forecast, coupled with the exclusion of revenue from China's data center business due to ongoing export restrictions, has intensified worries about a potential slowdown in AI investment growth. The company's cautious outlook has raised questions about the durability of the AI-driven market rally that has propelled NVIDIA to become one of the world's most valuable companies.
Adding to the uncertainty, NVIDIA faces challenges in the Chinese market due to U.S. export controls. The company reported no sales of its H20 AI chips to Chinese customers in the second quarter and is awaiting U.S. government approval for further sales. This geopolitical tension introduces additional volatility to NVIDIA's business prospects, contributing to the negative sentiment surrounding the stock and its related ETFs.
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