Because markets are forward-looking. They know this cycle of the AI hype bubble is coming to an end, so to put it simply, this earnings release is as good as it will get for a while. The market believes there's nowhere to go but down from here.
They literally guided more growth for the next quarter and Nvidia is notorious for sandbagging this number.
Not achieving those results does not imply that results are going downhill from now, as you suggest.
Slowing growth and cooling margins are reasonable explanations for the stock being down even in light of continued growth.
If the market believed that demand had indeed peaked this quarter as you suggest, the stock would absolutely crater.
But nobody reasonable believes that. All the data from outside Nvidia (eg: Capex from hyperscalers) also points to continued growth.
Besides Apple, who can't be forced to build server hardware at gunpoint, Nvidia is the only TSMC customer bringing HPC to the consumer. That's an enormous segment they can capitalize on, and AI is really just the tip of the iceberg. With so many other OEMs laser-focused on AI performance, they're entirely glossing over the flexibility that made CUDA successful in the first place. Pour another one out for OpenCL, the industry hardly knew ye.
TSMC doesn’t sell chips directly, they just manufacture designs
It's just that the rate of growth is slowing and when nvda is at a 45 P/E, you need high growth to justify its market cap.