Nvidia Earnings Disappointed. GE Vernova and 5 More Industrial Stocks Get a Boost.

Nvidia investors might have been disappointed with the AI giant’s earnings, but investors in industrials saw lots to like. Above, GE Vernova’s workhorse 3 MW turbine in New Mexico. (Courtesy GE Vernova)

Nvidia stock wobbled after the company reported its fiscal second-quarter earnings. Earnings, however, were fine. Just look at the reaction of some key industrial stocks.

Wednesday evening, Nvidia reported fiscal second-quarter earnings of $1.05, just ahead of Wall Street estimates. Sales guidance of $54 billion for the third quarter was also a little better than Street projections.

Still, Nvidia stock was down shortly after the company reported results, and dropped 0.8% on Thursday, closing at $180.02. The S&P 500 and Dow Jones Industrial Average rose 0.3% and 0.2%, respectively.

Shares falling after solid results can feel strange, but with respect to results, Wall Street is an expectations game. Coming into the quarter, Nvidia had beaten the Street in its prior four quarterly reports, but the stock rose only twice. Based on the past four reports, Nvidia needed to beat Street earnings estimates by about 10%, not the 5% beat it posted, to see shares rise.

That doesn’t mean the artificial-intelligence trade is dead—industrial investors look pleased with the outlook. Nvidia’s sales guidance points to 50%-plus growth in the third quarter. What’s more, the company sees data-center capital spending between $3 trillion and $4 trillion a year by 2030, up from about $2 trillion today, wrote Melius Research analyst Ben Reitzes in a Thursday report.

Shares of industrial companies that sell into data-center and power-generation end markets were doing fine on Thursday. Shares of power-generation-technologies company GE Vernova added 1.8%, closing at $633.69. (Power-hungry AI data centers are boosting U.S. demand for electricity.)

Shares of components suppliers TE Connectivity, Amphenol, and Eaton each rose an average of about 1%. Coming into Thursday trading, those three stocks were up an average of 42% over the past 12 months.

Shares of data-center infrastructure provider Vertiv rose 3.8% on Thursday, while shares of grid infrastructure provider Quanta Services rose 1.2%.

Wall Street remains high on all six of the industrial stocks. On average, 67% of analysts covering the stocks rate them Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.

Nvidia earnings look to be good enough for everyone—except Nvidia. Still, coming into Thursday trading, Nvidia stock was up more than 40% over the past 12 months, and the company is worth some $4 trillion.

Write to Al Root at allen.root@dowjones.com