AI Stocks Experience Sell-Off Amid Trade Policies and Earnings

AI Stocks in Trouble: Nvidia's recent earnings report disappoints investors, accelerating market sell-offs, causing a dip in Nvidia and several others. Opportunities arise in Micron, Oracle, and Meta amid challenges.

Date: 25-03-2025

AI Rating: 5

Impact on Earnings and Revenue Growth: The report highlights Nvidia's financial performance, indicating a failure to meet investor expectations, which has led to significant stock sell-offs in the AI sector. Specifically, Nvidia has seen its stock trade over 20% below its early-year high, signaling negative investor sentiment. Micron Technology has promising earnings as analysts expect a 62.5% increase in EPS for fiscal 2026 following an impressive 429% surge this year. Oracle is also positioned favorably, as its Database MultiCloud revenue surged by 92% sequentially, paving the way for robust future growth.

Net Income and Profit Margins: Although specific net income and profit margin figures were not discussed, the anticipated growth rates for Micron and Oracle suggest positive future performance in these areas. Micron's forward P/E of 15 indicates attractive valuation, implying profit potential as demand for memory chips rises. Meanwhile, Oracle's growing remaining performance obligations of $130 billion (up 63% year-over-year) indicates its revenue potential.

Free Cash Flow and Return on Equity: The report does not explicitly address free cash flow or return on equity for these companies, limiting insights into these critical areas. The cyclical nature of Micron's business model may impact its free cash flow during downturns.

Rating of Key Points: 1. Nvidia (rating: 4), 2. Micron Technology (rating: 7), 3. Oracle (rating: 7), 4. Meta Platforms (rating: 6). The overall rating for the overall market sentiment detailed in the report leans toward slightly negative and stands at a 5.

Stocks: NVDA MU ORCL META