Nvidia share price fell over 3% in extended trading on Wednesday after the company reported its second-quarter earnings. The stock declined 3.14% to $181.60 in after-hours trade, wiping out nearly $110 billion in market value and bringing its market capitalisation down to $4.43 trillion.
For the second quarter ended July 27, Nvidia posted revenue of $46.7 billion, up 56% from a year earlier and slightly above Wall Street’s estimate of $46.2 billion. This marked the slowest pace of growth in more than two years. Adjusted profit stood at $26.4 billion, or $1.05 per share, beating the consensus forecast of $1.01.
The company’s key data center unit delivered sales of $41.1 billion, marginally below analyst expectations of $41.3 billion. Gaming revenue came in at $4.29 billion, surpassing estimates of $3.8 billion, while automotive sales stood at $586 million, just shy of projections.
Nvidia’s board also approved a new $60 billion stock buyback programme, in addition to the $14.7 billion that remained under its previous repurchase plan at the end of the second quarter.
Looking ahead, Nvidia guided for revenue of $54 billion, plus or minus 2%, for the third quarter, ahead of analysts’ average forecast of $53.14 billion, according to LSEG data.
China sales weigh on outlook
Despite the strong results, concerns over Nvidia’s China business overshadowed the upbeat guidance. The company disclosed a $4 billion decline in sales of its H20 processors — chips tailored for the Chinese market — amid escalating US-China trade tensions.
The company’s third-quarter forecast excludes any contribution from H20 sales. Chief Executive Jensen Huang said Nvidia expects to resume shipments to China once it receives US government approval under a deal struck with President Donald Trump that would involve paying commissions to Washington.
However, with no formal rules in place and uncertainty over potential pushback from Chinese regulators, Nvidia refrained from factoring China sales into its near-term outlook, Reuters reported.
(With inputs from Agencies)
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