Key Highlights

● Nvidia lagged the chip sector during the regular session.

● It slipped again after hours in sympathy with Alphabet.

● Alphabet is a major buyer of Nvidia's AI chips.

● Microsoft offered a counterpoint, rising on its own beat.

Nvidia shares edged lower in extended trading on Wednesday, October 28, after Alphabet's earnings miss cooled enthusiasm for AI stocks, adding to a decline during the regular session.

Nvidia (NASDAQ:NVDA) slipped for a second time on Wednesday. The AI chip leader edged lower during the regular session even as the broader semiconductor sector rallied, then dipped again in extended trading after Alphabet's disappointing results weighed on sentiment toward artificial intelligence stocks.

Lagging the Chip Rally

No company-specific news from Nvidia was cited for either move. The after-hours decline came in sympathy with Alphabet, a major customer for AI chips. The regular session was a strong one for most chipmakers: South Korea's SK hynix (NASDAQ:SKHY) reported a more than sevenfold jump in profit and said it expects the memory shortage to last into 2030, sparking a rally in memory and equipment names.

Micron (NASDAQ:MU), Sandisk (NASDAQ:SNDK), Lam Research (NASDAQ:LRCX), Applied Materials (NASDAQ:AMAT), Arm (NASDAQ:ARM), AMD (NASDAQ:AMD) and Marvell (NASDAQ:MRVL) all climbed, and the Philadelphia Semiconductor Index rose for a fourth straight day to 11,684.00. Nvidia, however, fell during the session, lagging its peers, with no specific reason given.

Alphabet's Miss

After the bell, Alphabet (NASDAQ:GOOGL) slid sharply in extended trading after reporting earnings of $2.12 a share, well below estimates, and revenue of $127.6 billion, slightly short of forecasts. Free cash flow turned negative. Alphabet did raise its 2026 capital spending forecast to between $195 billion and $205 billion, and Google Cloud revenue beat expectations.

Alphabet is one of the largest buyers of AI computing power, and its results are closely watched as a gauge of whether the massive spending on AI infrastructure is paying off. The miss appeared to raise fresh questions among investors about that return, and Nvidia, as the dominant supplier of AI accelerators, edged lower in sympathy. Micron also slipped after hours, and Nasdaq-100 futures dipped overnight.

The AI Debate

Microsoft (NASDAQ:MSFT) offered a counterpoint, rising after the bell after its Azure cloud business accelerated and it beat estimates. BCA Research's Peter Berezin said he thinks the market is heading for an AI capex bust, though probably not until 2028, while Fed Chair Kevin Warsh, by contrast, said capital spending is not just strong but broadening.

The Nasdaq-100 closed at 29,813.16, up 161.72 points. The Nasdaq Composite rose 72.04 points to 26,549.85, and the S&P 500 added 21.38 points to 7,743.98, its third straight gain.

What to Watch

The Federal Reserve left its benchmark rate range unchanged in a 10-2 vote, and long-dated Treasury yields climbed, with the 10-year pushing past a key psychological threshold.

Nvidia's next move may depend on how investors digest Alphabet's results at Thursday's open and whether the after-hours dip in AI names carries into regular trading. Amazon (NASDAQ:AMZN), another major buyer of AI chips, reports after the close, and Apple (NASDAQ:AAPL) and Meta (NASDAQ:META) report later this week.