Why these 2 Nasdaq Crypto stocks moved in opposite directions on Thursday

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The stock market was volatile on Thursday, but the Nasdaq Composite (NASDAQINDEX: ^ IXIC) again outperformed. As of 1 p.m. EDT, the Nasdaq was up more than half a percent, beating other major benchmarks.

Cryptocurrency stocks have gained a lot of attention lately, especially with the huge price movements of various tokens. Many investors prefer the ancillary crypto games, and on Thursday investors had their first chance to react to the latest earnings reports from Nvidia (NASDAQ: NVDA) and Robinhood Markets (NASDAQ: HOOD). Below, we’ll take a look at these two Nasdaq stocks to see how they reacted to the rapidly changing crypto market over the past quarter.

Nvidia takes a boost

Nvidia shares rose 5% on Thursday afternoon. Connecting the semiconductor stock to cryptocurrency involves the frequent use of its graphics processing unit chips in mining rigs, but the company is going way beyond this niche, and its latest results showed the continued success of the business.

Nvidia’s numbers were fantastic. Revenue hit a record $ 6.51 billion, up 68% year-over-year in the second quarter of 2021. Gaming revenue climbed 85%, while the data center segment posted gains of respectable sales of 35%. Adjusted earnings of $ 1.04 per share exceeded expectations and increased nearly 90% from levels a year ago. Nvidia continued to expand its margins and generate immense levels of free cash flow.

Image source: Getty Images.

In addition, Nvidia sees demand increasing. The forecast of $ 6.8 billion in sales for the third quarter would be a new record.

On a negative note, Nvidia said its planned acquisition of Arm Holding will likely take longer than expected. Nonetheless, the company still seems optimistic about its ability to overcome obstacles and close the deal.

Investors are responding positively to the high demand for computing power at all levels, going far beyond cryptocurrency to encompass all aspects of digital transformation. As long as these underlying trends remain intact, Nvidia seems well positioned to take full advantage of them.

Robinhood slides

Meanwhile, Robinhood Markets shares fell more than 8%. The retail investment broker’s first financial report as a publicly traded company included encouraging metrics, but Robinhood also warned of some unfavorable trends in crypto trading behavior that could affect its fundamentals going forward.

Robinhood’s second quarter numbers were pretty solid, but there were some startling details. Total net revenue jumped 131% to $ 565 million, with transaction-based revenue growing at an even faster pace of 141%. The vast majority of earnings gains come from cryptocurrency trading, with segment sales reaching $ 233 million from just $ 5 million in the previous year’s quarter. In contrast, turnover from equity transactions fell by more than 25% over the period and represented less than 10% of the company’s total turnover. The total number of users doubled to 21.3 million, while assets under custody tripled to over $ 100 billion. Still, the company recorded a substantial loss, as many had predicted.

However, Robinhood sees headwinds ahead. In particular, the broker believes seasonality will contribute to lower levels of business activity in the third quarter, and Robinhood does not expect to see such a high volume of new clients. The company plans to invest in platform enhancement technology. , but investors also need to be prepared for significant stock-based compensation charges and the prospect of entering the newly registered stock market in the coming months.

Robinhood has democratized investing, but that doesn’t mean he’ll make money doing it. For now, shareholders will need to be patient to see where Robinhood’s next big revenue stream comes from.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a premium Motley Fool consulting service. Were motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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