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Chip leader in artificial intelligence Nvidia (NVDA) late Wednesday beat Wall Street’s targets for the second fiscal quarter and topped expectations for the current period. But Nvidia shares fell in extended trading.
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AI is going to the next level: in the chips that power Nvidia stock
The Santa Clara, California-based company earned adjusted profit of 68 cents per share on revenue of $30.04 billion in the quarter ended July 28. Analysts polled by FactSet expected earnings of 65 cents per share on revenue of $28.74 billion. On a year-over-year basis, Nvidia’s revenue rose 152%, while sales rose 122%.
Nvidia’s second quarter report marked its fifth straight quarter of triple-digit annualized percentage gains.
For the current quarter, Nvidia expects revenue of $32.5 billion, beating expectations of $31.71 billion. In the same quarter last year, Nvidia posted revenue of $18.12 billion.
During after-hours trading on the stock market today, Nvidia stock fell more than 5% to 118.24. Year to date through Wednesday’s close, Nvidia shares are up 154%.
Nvidia stock has been consolidating at a 140.76 buy point for the past ten weeks, according to IBD market wave graphs.
Nvidia is the main arms dealer in the generative AI market, selling chips and complete computer systems for AI data centers.
Check back here for more live coverage of the company’s highly anticipated earnings report.
6:15 PM ET
CEO Jensen Huang reaffirmed his view that Nvidia is playing a crucial role in a major technology trend.
“We are at the beginning of our journey to modernize trillion-dollar data centers, from general purpose computing to accelerated computing,” he told analysts.
But Nvidia stock fell about 7% as the company completed its earnings call.
5:37 PM ET
‘Enterprise AI wave has begun’
Nvidia’s chip supply from its contract manufacturers improved in the quarter, but demand remains “well above supply,” Chief Financial Officer Colette Kress said on a conference call with analysts.
Demand for Nvidia’s AI systems has also expanded beyond hyperscale cloud service providers. Notably, Nvidia is now working with most Fortune 500 companies on AI initiatives, Kress said.
“The enterprise AI wave has begun,” she said. Companies using Nvidia AI technology include Accenture (ACN), Amdocs (DOX), JUICE (JUICE), ServiceNow (NOW) And Snowflake (SNOW), she said.
During the call, CEO Jensen Huang said that Nvidia made no functional changes to its Blackwell processors during the test production phase. He reiterated that the company will ship Blackwell products in large quantities in the fourth quarter.
5:07 PM ET
Analyst: ‘Smaller beat’ a warning sign
Why are Nvidia shares falling? Investors likely wanted a bigger beat-and-raise from Nvidia, Thomas Monteiro, senior analyst at Investing.com, said in a client note.
“While the numbers indicate that the AI revolution is still alive and well, the smaller trend compared to previous quarters adds to the many warning signs in the tech sector earlier this earnings season,” Monteiro said.
Meanwhile, CFO Colette Kress said Nvidia is on track to sell Blackwell products in the fiscal fourth quarter.
“We shipped customer samples of our Blackwell architecture in the second quarter,” she said in a written statement. “We have made a change to the Blackwell GPU mask to improve production efficiency. Blackwell production is expected to begin in the fourth quarter and continue through fiscal year 2026. In the fourth quarter, we expect to deliver several billion dollars in Blackwell revenues.”
The earnings call has started.
1:53 PM ET
Nvidia is touting the stock buyback plan
Nvidia announced an additional $50 billion share buyback program, with no expiration date. At the end of the July quarter, it had $7.5 billion remaining under its previous share buyback authorization.
In the second fiscal quarter, Nvidia achieved record data center revenue of $26.3 billion. Turnover in this segment increased by 16% compared to the first quarter of the financial year and by 154% compared to the second quarter of last year.
“Hopper demand remains strong and expectations for Blackwell are incredible,” CEO Jensen Huang said in a press release. press release. “Nvidia has achieved record revenue as global data centers ramp up to modernize the entire computing stack with accelerated computing and generative AI.”
Nvidia is now shipping samples of its Blackwell processors to partners and customers, Huang said. He made no mention of a rumored delay in the delivery of the next generation of graphics processing units.
4:10 PM ET
Nvidia Stock: “Derisking” Ahead of Earnings
Nvidia stock pared losses but ended the regular session down 2.1% to 125.61 ahead of the earnings report.
An analyst at Mizuho Securities attributed the decline to “risk reduction.”
“Everyone knows earnings and expectations will be solid,” Daniel O’Regan, director of equities trading at Mizuho Securities, said in a client note. “The question is how solid and whether they are enough to sustain this year’s 150% move.”
11:50 am ET
Nvidia Stocks Still Lower, SMCI Plummets
Nvidia stock was still down more than 2% in afternoon trading.
Another big player, Super microcomputer (SMCI) saw its shares plunge by more than 24% after the data center specialist was reeling from allegations of accounting irregularities. On Wednesday, SMCI announced it is delaying the filing of its annual report on Form 10-K with the U.S. Securities and Exchange Commission.
11:24 am ET
The chip giant’s shares fell in late morning trades. Nvidia will release results shortly after the market closes at 4:00 PM ET.
The report is expected to shed light on the state of AI. Nvidia provides “the best venue and vantage point to discuss overall enterprise AI demand and the demand for Nvidia’s AI chips going forward,” Wedbush analyst Dan Ives said in a note to clients.
“We expect another decline in microphone performance from Nvidia,” he said.
9:04 am ET
Nvidia Stock Gets Price Target Hike
On Tuesday, Truist Securities analyst William Stein reiterated his buy rating on Nvidia stock and raised his price target from 140 to 145.
“Our regular dialogue with component buyers and sellers reflected Nvidia’s increasingly improving business trends,” Stein said in a client note. “This, combined with publicly available data on AI investment and adoption, has led us to modestly increase the estimates.”
Stein said he has found no evidence to confirm rumors of a delay for Nvidia’s upcoming Blackwell chips. “We believe such ‘delays’ are more likely to be a supply chain disruption than reality,” he said.
Nvidia stock is on three IBD lists: IBD50Leaderboard and technical leaders.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer tech, software and semiconductor stocks.
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