Nvidia, a leader in artificial intelligence chips, reported impressive earnings for its fiscal second quarter late Wednesday, surpassing Wall Street expectations and providing an optimistic outlook for the upcoming period. However, despite the strong results, Nvidia’s stock experienced a downturn in extended trading.
The company, based in Santa Clara, California, achieved adjusted earnings of 68 cents per share on revenues of $30.04 billion for the quarter ending July 28. Analysts had predicted earnings of 65 cents per share and sales of $28.74 billion. Compared to the same quarter last year, Nvidia’s earnings soared by 152%, and sales increased by 122%.
This fiscal second quarter marked Nvidia’s fifth consecutive quarter of triple-digit year-over-year growth.
For the current quarter, Nvidia projected revenues of $32.5 billion, exceeding the anticipated $31.71 billion. Last year during the same period, the company reported sales of $18.12 billion.
In after-hours trading, Nvidia’s stock fell by more than 5%, bringing it down to $118.24. Nevertheless, the stock has risen 154% year-to-date prior to this decline.
The stock had been consolidating for the previous ten weeks at a buy point of 140.76 according to IBD MarketSurge charts. Nvidia has positioned itself as a primary supplier in the generative AI market, providing chips and whole systems for AI data centers.
During the earnings call, CEO Jensen Huang reiterated Nvidia’s pivotal role in a significant technological transformation, emphasizing the modernization of extensive data centers from general-purpose computing to accelerated computing.
However, the stock continued to fall by around 7% after the earnings call concluded. CFO Colette Kress remarked that while Nvidia’s chip supply has improved in the quarter, demand continues to outstrip supply. She noted that requests for Nvidia’s AI systems have expanded beyond large-scale cloud services, with most Fortune 500 companies now engaging with Nvidia on AI projects.
Kress stated, “The enterprise AI wave has started,” listing companies including Accenture, Amdocs, SAP, ServiceNow, and Snowflake as users of Nvidia’s AI technologies.
Huang confirmed that there had been no significant alterations to their Blackwell processors during the testing phase, asserting that Nvidia will begin shipping Blackwell products in volume during the fourth quarter.
Analyst Thomas Monteiro from Investing.com indicated that the drop in Nvidia’s stock price may stem from investor expectations for a larger earnings surprise than what was delivered. He noted that the smaller earnings beat could signal potential issues in the tech sector.
Nvidia is also set to release Blackwell products in the upcoming fiscal fourth quarter, with Kress mentioning that the production ramp is scheduled to begin then and continue into fiscal 2026. The company expects significant revenue from Blackwell products in the fourth quarter.
In news related to shareholder value, Nvidia announced a new $50 billion share repurchase program, with $7.5 billion left under its prior authorization by the end of July.
Nvidia achieved record data center revenue of $26.3 billion for the fiscal second quarter, marking a 16% growth from the first quarter and up 154% from the previous year. Huang praised the strong demand for their Hopper architecture and the anticipation surrounding the Blackwell series.
Amid these developments, Nvidia’s stock started the regular trading session down 2.1% at $125.61. Another company in the sector, Super Micro Computer, faced a stark decline of over 24% due to allegations of accounting irregularities.
Overall, Nvidia’s strong earnings and strategic plans for expansion continue to position it as a key player in the rapidly evolving AI industry, despite recent fluctuations in stock performance.