Nvidia beat earnings expectations, but Wall Street wants more

Nvidia is arguably one of the biggest winners of the AI ​​boom – repeatedly beating estimates, becoming (briefly) the most valuable company in the worldand the beating millionaire employees.

But when the AI ​​king jets beat earnings estimates again this week, its falling shares reflected unimpressed investors wanting more.

The chipmaker reported record second quarter revenue of $30 billion for fiscal year 2025 — up 122% from a year ago. Analysts had estimated revenue of $28.7 billion for the second quarter — more than double the year-ago revenue of $13.5 billion, according to FactSet.

Despite the pace, the chipmaker’s shares fell 6.9% in after-hours trading on Wednesday after the release — likely because it missed guidance expectations. Shares of Nvidia remained down about 3.9 percent in premarket trading on Thursday and remained in the red before recovering some ground on Friday.

The company set its third-quarter revenue estimate at $32.5 billion, plus or minus 2 percent — slightly above the average analysts expected but below top estimates.

“The market was clearly hoping for another breakout where expectations were pushed once again,” said Richard Windsor, founder of research firm Radio Free Mobile. However, Windsor believes that “Nvidia has much better visibility than it assumes” and expects to beat guidance with about $34 billion in revenue next quarter.

Thomas Monteiro, senior analyst at Investing.com, said in a comment shared with Quartz that while Nvidia’s results “indicate that the AI ​​revolution remains alive and well, the slower pace compared to previous quarters adds to the multiple warning signs from earlier technology space. in this earnings season.”

Windsor offered a similar analysis, saying the market “wanted to see some more beating and growth” but that “Nvidia’s failure to get even bigger has allowed a sliver of doubt to creep in.”

The company’s stock is expected to be “volatile” due to the sales outlook, Bank of America research analyst Vivek Arya said in a BoA Global Research report on Wednesday. Jefferies analysts also noted that Nvidia missed guidance expectations, but said in a note on Wednesday that “the important point is that the Blackwell delay is in the rearview mirror.”

Nvidia reported strong demand for its Hopper chips in the second quarter and expected to grow in the second half of the year. Hopper of the company graphics processing units or GPUsare used for training and deduction some of the most powerful in the world large language models (LLM). Meanwhile, Nvidia has delivered customer samples Blackwell AI Platform during the second quarter, it said, adding that Blackwell’s production will ramp up in the fourth quarter through fiscal 2026. Nvidia Chief Executive Jensen Huang previously said Blackwell would ramp up in the third quarter and will be with customers in the fourth quarter.

As spending increases for tech companies, along with rising prices for AI infrastructure, “companies are becoming more aware of their margins when it comes to AI,” Investing.com’s Monteiro said, meaning customers “it may take more time to get to the kind of growth in spending. the market previously predicted.”

While this doesn’t look good for Nvidia, “given that the company can only benefit from a sense of urgency among other companies before the competition starts to catch up,” Monteiro said investors shouldn’t worry about a deeper sell. Companies continue to spend on data center chips “regardless of the costs on the other end of the balance sheet,” Monteiro said, and because Nvidia is “the sole owner of the most valuable commodity on the market,” it has the power to continually change the prices. based on market demand.