Nvidia's earnings are so strong, why is the stock price still not moving? Can't Wall Street really understand it?

Many people think: good earnings report = must surge the next day.
But the truth is: stock prices trade not on "good or bad," but on "whether it exceeds the most optimistic expectations," plus fund flows and position constraints.
First, the most critical point: analysts are professional at interpreting earnings, but analysts ≠ the people responsible for buying and selling.
Those who actually press the button have more to manage: position limits, drawdowns, benchmark indices, redemption cash, hedging, risk control settings… So you’ll see "fundamentals aren’t bad, but still get cut."
Selling pressure usually comes from three categories:
1. Position/fund-driven: Many sales are "forced"
• Rebalancing/position limits: Big funds often have single-stock limits, sector limits, Beta limits. When the stock rises, its weight passively increases, forcing sales to rebalance.
• Risk control triggers: Hedge funds/quants have VaR, volatility targets, leverage constraints—when volatility spikes, they must reduce positions.
• Redemptions/quarter-end settlements: Mutual funds, ETFs, and open-end funds facing redemptions must sell to raise cash, regardless of whether they hold the best companies; month/quarter-end also sees concentrated "settlement-style" selling.
2. Expectations and valuation: Earnings are good, but the "expectation gap" isn’t big enough
• Expectations changed: The market wanted "more explosive," but only got "very strong," leading to weakness after the good news.
• "Sell the fact"/profit-taking: Institutions front-run, then cash out when earnings land—common in crowded trades. This isn’t bearish; often just means "this trade cycle is over."
3. Mechanical selling: Looks like unwinding, but it’s strategy execution
• Options hedging mechanics: Protective puts, covered calls, delta/gamma hedging trigger passive selling at certain levels, making moves seem "sudden."
• Factor rotation: Quant funds switch between momentum/quality/valuation/volatility factors—when factors reverse, "good companies get sold too."
Applied to NVIDIA: Post-earnings pop shows the market approves of the results, but the next day’s fade often reflects "earnings landing + profit-taking + style/risk appetite shifts." Plus, NVDA’s huge gains and crowded positioning mean the market demands: It must exceed even the rosiest expectations to keep rallying.
So you see: Even good earnings can’t lift it. It’s not confusion—it’s the structure of positions and expectation gaps talking.
Short-term traders care about "positioning"; long-term investors care about "trends and cash flow." As long as growth logic and earnings quality hold, short-term selling is more like giving long-term money a better entry price.