Nvidia’s shares slide despite record Q2 revenues
What’s happening:-
Shares of Nvidia declined on Thursday, after the company released its second-quarter results.
What happened:-
The computing infrastructure company reported stronger-than-expected sales and earnings for the second quarter.
However, Nvidia’s datacentre revenues missed market expectations for the second consecutive quarter, weighing on the stock.
Nvidia stock declines
The Santa Clara, California-based company reported double-digit revenue growth for the second quarter.
- Revenues jumped 56% year-over-year to a record high of $46.74 billion, topping consensus estimates of $46.02 billion.
- Adjusted earnings came in at $1.05 per share for the quarter, beating Wall Street expectations of $1.01 per share.
Nvidia Stock Falls After Earnings Report: Critical Price Levels to Keep an Eye On
Why it matters:-
Nvidia had zero sales of H20 chips in China during the latest quarter. However, the AI chipmaker did manage to record revenues of $180 million from the sale of previously reserved H20 inventories to a customer outside China.
Nvidia has been trying to navigate trade restrictions on H20 shipments to the Asian nation since the Trump administration’s crack down and ban in April. Following a meeting between CEO Jensen Huang and President Donald Trump during the latest quarter, Nvidia said it was hopeful of receiving US licenses to export its H20 chip to China.
The company’s datacentre revenues jumped 56% year-over-year to $41.1 billion but came in short of consensus estimates of $41.34 billion.
Sales in the gaming division, which used to be the company’s biggest segment before the AI book, climbed 49% year-over-year to $4.3 billion. Sales in the robotics division rose 69% year-over-year to $586 million.
Nvidia stocks today
Blackwell Data Center revenues grew 17% in the second quarter. Blackwell is the company’s next-gen GPU architecture and platform that is designed to power advanced AI, generative AI, and high-performance computing (HPC) workloads.
Nvidia repurchased $9.7 billion worth of its stock during the second quarter and announced a new share buyback authorisation of $60 billion.
Management guided to revenues of $52.92-$55.08 billion for the third quarter. The projections assume no H20 shipments to China.
How shares responded: Nvidia’s shares slipped 0.8% to close at $180.12 on Thursday following the release of quarterly results. The stock has jumped around 44% over the past six months.
What to watch:-
Investors will monitor the progress made by Nvidia in securing the required US licenses to send H20 chips to China.