Nvidia earnings beat expectations, data centre miss tempers market reaction

(Sharecast News) - Chipmaker Nvidia posted second-quarter earnings late on Wednesday that topped Wall Street estimates, but shares traded lower after data centre sales fell short of expectations. Revenues rose 56% year-on-year to $46.7bn, and net income surged 59% to $26.4bn, while adjusted earnings per share came in at $1.05, ahead of consensus estimates, while gross margins remained robust at 72.7%.

Nvidia's Q2 gains were driven by continued strength in AI infrastructure demand, particularly for its Blackwell GPU architecture, which saw a 17% sequential increase in data centre revenue. However, total data centre sales of $41.1bn fell short of analyst estimates, reflecting the lingering impact of export restrictions to China and inventory adjustments.

"Blackwell is the AI platform the world has been waiting for, delivering an exceptional generational leap - production of Blackwell Ultra is ramping at full speed, and demand is extraordinary," said chief executive Jensen Huang.

"The AI race is on, and Blackwell is the platform at its centre. We are at the beginning of a new industrial revolution. Companies and countries are partnering with Nvidia to shift the trillion-dollar installed base of data centres to accelerated computing and build a new type of data centre-AI factories-to produce artificial intelligence."

Nvidia's results had ripple effects across the broader AI sector, with sentiment cooling slightly as traders reassessed valuations and growth expectations.

As of 1340 BST, Nvidia shares were down 0.28% in pre-market trading at $181.10 each.





Reporting by Iain Gilbert at Sharecast.com