Artificial intelligence chip leader Nvidia late Wednesday beat Wall Street's targets for its fiscal second quarter and guided higher than views for the current period. But Nvidia stock fell in extended trading.
The Santa Clara, Calif.-based company earned an adjusted 68 cents a share on sales of $30.04 billion in the quarter ended July 28. Analysts polled by FactSet had expected earnings of 65 cents a share on sales of $28.74 billion. On a year-over-year basis, Nvidia earnings soared 152% while sales jumped 122%.
Nvidia's fiscal Q2 report marked its fifth straight quarter of triple-digit percentage gains on a year-over-year basis.
For the current quarter, Nvidia forecast revenue of $32.5 billion, topping expectations for $31.71 billion. In the same quarter last year, Nvidia posted sales of $18.12 billion.
In after-hours trading on the stock market today, Nvidia stock dropped more than 5% to 118.24. Year-to-date through Wednesday's close, Nvidia stock is up 154%.
Nvidia stock has been consolidating for the past 10 weeks at a buy point of 140.76, according to IBD MarketSurge charts.
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 p.m. ET
Nvidia Stock Down Sharply As Call Ends
CEO Jensen Huang reaffirmed his view that Nvidia is playing a critical role in a major technology trend.
"We are at the beginning of our journey to modernize a trillion dollars worth of data centers from general purpose computing to accelerated computing," he told analysts.
But Nvidia stock was down roughly 7% as the company wrapped up its earnings call.
5:37 p.m. ET
'Enterprise AI Wave Has Started'
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.
Also, demand for Nvidia's AI systems has expanded beyond hyperscale cloud service providers. Notably, Nvidia now is working with most of the Fortune 500 companies on AI initiatives, Kress said.
"The enterprise AI wave has started," she said. Among the companies using Nvidia AI technology include Accenture, Amdocs, SAP, ServiceNow and Snowflake, she said.
On the call, Chief Executive Jensen Huang said Nvidia has made no functional changes to its Blackwell processors during the test production phase. He reiterated that the company is going to be shipping out Blackwell products in volume in the fourth quarter.
5:07 p.m. ET
Analyst: 'Smaller Beat' A Warning Sign
Why is Nvidia stock sinking? 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 remains alive and well, the smaller beat compared to the previous quarters adds to the multiple warning signs across the tech space earlier in this earnings season," Monteiro said.
Meanwhile, Chief Financial Officer Colette Kress said Nvidia is on track to sell Blackwell products in its fiscal fourth quarter.
"We shipped customer samples of our Blackwell architecture in the second quarter," she said in a written statement. "We executed a change to the Blackwell GPU mask to improve production yield. Blackwell production ramp is scheduled to begin in the fourth quarter and continue into fiscal 2026. In the fourth quarter, we expect to ship several billion dollars in Blackwell revenue."
Earnings call has started.
1:53 p.m. ET
Nvidia Touts Share Buyback Plan
Nvidia announced an additional $50 billion share repurchase program, without expiration. At the end of the July quarter, it had $7.5 billion remaining under its previous share repurchase authorization.
In its fiscal Q2, Nvidia delivered record data center revenue of $26.3 billion. Sales in the segment rose 16% from fiscal Q1 and 154% from the second-quarter last year.
"Hopper demand remains strong, and the anticipation for Blackwell is incredible," Chief Executive Jensen Huang said in a news release. "Nvidia achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI."
Nvidia is now shipping samples of its Blackwell series processors to partners and customers, Huang said. He made no mention of a rumored delay in delivering the next-generation graphics processing units.
4:10 p.m. ET
Nvidia Stock: "De-risking" Ahead Of Earnings
Nvidia stock trimmed losses but ended the regular session down 2.1% to 125.61 ahead of the earnings report.
A Mizuho Securities analyst attributed the decline to "de-risking."
"Everyone knows that earnings and guidance are going to be solid," Daniel O'Regan, managing director of equity trading for Mizuho Securities, said in a client note. "The question is how solid and are they enough to sustain this year's 150% move."
11:50 a.m. ET
Nvidia Stock Still Down, SMCI Plunges
Nvidia stock was still down more than 2% in midday trades.
Another major player, Super Micro Computer saw its shares plunge more than 24% as the data center specialist reeled from allegations of accounting irregularities. On Wednesday, SMCI announced that it is delaying the filing of its annual report on form 10-K with the U.S. Securities and Exchange Commission.
11:24 a.m. ET
Nvidia Stock Down More Than 3%
The chip giant's shares retreated in late morning trades. Nvidia is set to post results shortly after the market closes at 4 p.m. ET.
The report is expected to shed light on the state of AI. Nvidia offers "the best perch and vantage point to discuss overall enterprise AI demand and the appetite for Nvidia's AI chips looking forward," Wedbush analyst Dan Ives said in a note to clients.
"We expect another drop the mic performance from Nvidia," he said.
9:04 a.m. 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 to 145 from 140.
"Our regular dialog with component buyers and sellers reflected Nvidia business trends continuing to improve," Stein said in a client note. "This, combined with publicly available data about AI investments and adoption lead us to raise estimates modestly."
Stein said he found no evidence to confirm rumors of a delay for Nvidia's upcoming Blackwell chips. "We believe such 'delays' are more likely supply-chain noise than reality," he said.
Nvidia stock is on three IBD lists: IBD 50, Leaderboard and Tech Leaders.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
