Not a Big Enough Beat for a Share Price Bump, NVIDIA Announces Positive Q2 As Expected

The mega chip maker NVIDIA (NVDA) announced Q2 earnings that beat estimates but not enough to warrant an increase in buying. Instead, shares fell on the announcement ~3.8%, a minor hiccup compared to its 150% YTD return. EPS and revenues for the quarter both modestly beat while guidance was either positive or reaffirmed. Notably, the company reported July quarter revenue of more than $30Bn, up 122% y/y. This was the fourth straight quarter of triple-digit revenue growth. However, as Nvidia continues to rapidly expand, annual comparisons are getting tougher.

The company’s newer chip, Blackwell is already going out all over the world today, and the company has started volume production, as NVDIA’s CEO Huang noted its functionality as “wonderful”. According to Huang, beyond the revenue that will be generated by Blackwell in Q4, the company will have a great next year as well.

Analysts remained optimistic as the company addressed concerns over Blackwell production and forecasted several billion dollars in revenue for Q4, along with continued growth in hopper metrics. However, concerns arose due to the lower implied gross margin outlook for Q4 and increased expenses, while Q3 topline guidance, though strong, didn’t meet higher expectations. Despite these challenges, many analysts remain bullish on the company’s prospects, citing its leadership in AI, with some viewing the recent stock weakness as a potential buying opportunity.