Nvidia Falls Amid Dell Earnings Miss, Elliott Takes $4B Stake in PepsiCo

US stocks decline to start the holiday-shortened week, weighed by tariff worries and upcoming jobs update. Nvidia extends decline after Dell's Q3 earnings outlook falls short of estimates. Bonds also under pressure with Treasury yields rising. Elliott Investment Management takes a $4 billion stake in PepsiCo, citing 50% upside potential.

US stocks kicked off the holiday-shortened week on a downward trajectory, influenced by escalating tariff worries and the impending jobs report. The broader market's sentiment was further dampened by Nvidia's (NVDA) continued decline following Dell Technologies' (DELL) third-quarter earnings outlook, which fell short of analysts' expectations. Additionally, Treasury yields rose, putting bonds under pressure.

Dell Technologies reported adjusted earnings per share of $2.32 in the second quarter, slightly ahead of analysts' expectations, but guided for third-quarter earnings per share of $2.45, below the $2.55 forecast. Revenue for the second quarter came in at $29.78 billion, exceeding estimates of $29.17 billion. Despite the strong revenue figures, the company's AI server sales growth of 58% year-over-year and a $4.5 billion order pipeline could not offset the earnings guidance [2].

Nvidia, a key player in the AI hardware ecosystem, reported Q3 2025 revenue of $35.1 billion, with Data Center segment revenue hitting $30.8 billion. However, gross margins in the Data Center segment dipped slightly, though executives expect stabilization in the mid-70s as production scales [2]. Nvidia's stock extended its decline as investors reacted to Dell's earnings guidance.

Meanwhile, PepsiCo (PEP) saw Elliott Investment Management take a $4 billion stake in the soda and snack giant. The activist investor cited potential for a 50% upside in the stock, indicating its belief in PepsiCo's untapped potential [3]. The move comes as PepsiCo has been grappling with softening demand across its drinks and snacks divisions.

The market's reaction to these developments underscores the ongoing volatility and uncertainty surrounding AI investments and the broader economic outlook. Investors will be closely watching for any further signs of stabilization or growth in the AI sector and the impact of PepsiCo's strategic changes.

References:
[1] https://finance.yahoo.com/news/analysts-unveil-surprising-dell-stock-200700836.html
[2] https://www.ainvest.com/news/navigating-ai-earnings-hype-dell-nvidia-spotlight-2508/
[3] https://finance.yahoo.com/news/elliott-investment-management-takes-stake-in-pepsi-sees-50-upside-for-the-stock-140502517.html