Nvidia’s share price is falling! Here’s what I think will happen next for the S&P 500

Before the market is open, Nvidia (NASDAQ:NVDA) shares fell 3% after it released its latest quarterly results. Given the fact that it has one of the biggest impacts on an individual in the course of S&P 500here’s what I think might be saved for reference until the end of the year.

Details behind the results

The move to this morning (21 November) is really interesting to me for a few reasons. Nvidia’s results exceed market expectations. Revenue came in at $35.08bn, a solid beat from the forecast of $33.16bn. Even on the bottom line, adjusted earnings per share beat the $0.75 expected by hitting $0.80. For the record, this was the eighth consecutive quarter for Nvidia to beat Wall Street forecasts.

Despite such a strong performance, the stock fell after the immediate results. I think this can be put down to the fact that the pace of growth is starting to slow down. For example, annual revenue growth was 94%. This may sound unbelievable, but let’s put things in perspective. Revenue growth last quarter compared to the comparable period of 2023 was 122%. The previous quarter was up 262% and the year before that was up 265%.

So the rate of decline is one point that has made investors stop and think. Another reason for stock price reaction is investor sentiment. While the results were good, investors were clearly expecting something even more impressive. Put another way, the bar was set so high that people would unfortunately be disappointed with almost anything that was released!

Index implications

Nvidia shares are up 190% in the past year. Given the size of the business, it actually helped contribute to a 30% gain in the S&P 500 index over the same period.

In the short term, I think we can see treading water for the index. The next step in Nvidia’s results is likely to cause investors to pause and take a breath at this meeting. Do things need to be reorganized? Is the price-to-earnings ratio excessive? Can the business continue to meet expectations over the next year? These are some possible points to consider.

In my opinion, I don’t see this as the start of a major correction in S&P 500 or Nvidia shares. But I think it will put the brakes on the index going up a lot at the end of the year. This is in line with the fact that some traders and investors may look to reduce their risk over Thanksgiving, while others choose to sit on their hands until January.

Looking ahead to 2025, I think the S&P 500 will continue to rise, but with other sectors being key drivers. For example, with the new Presidency, I think US stocks like it Tesla it will be extremely successful. On that basis, I wouldn’t buy Nvidia right now.