NVIDIA, the leading company in AI semiconductors, released unexpected earnings results after the market closed on August 28. Along with its earnings report, NVIDIA announced a plan to buy back $50 billion of its own shares.
Despite the significant share buyback announcement, NVIDIA’s stock fell more than 4% in after-hours trading. The drop came because the company’s earnings did not fully meet investors’ expectations.
Strong Earnings Surprise
NVIDIA exceeded market forecasts for the second-quarter earnings for the 2025 fiscal year, which ended in July.
The quarterly revenue reached $30 billion, marking a 122% increase compared to last year.
This figure significantly surpassed Wall Street analysts’ expectations of $28.7 billion.
Net profit more than doubled last year’s second-quarter profit of $6.18 billion, reaching $16.6 billion or $0.67 per share.
The adjusted earnings per share (EPS) was $0.68, also above the market expectation of $0.64.
The outlook for the upcoming quarter’s earnings was also promising.
For the third fiscal quarter, NVIDIA projected revenue to be $32.5 billion, exceeding analysts’ expectations of $31.7 billion.
Slowing Revenue Growth
However, investors remained unsatisfied.
Despite the strong earnings, they focused on the slowing revenue growth.
After recording revenue growth rates exceeding 200% year-over-year for three consecutive quarters, the growth rate dropped to 122% in the second quarter.
If NVIDIA meets its projections for the upcoming quarter, its revenue growth rate will fall to 80%.
While this still represents very high growth, a slowdown may unsettle investors, given the steep rise in stock prices.
NVIDIA’s stock surged 240% last year and 150% this year, suggesting that this earnings growth has already been reflected in the stock price.
Blackwell
Earlier this month, reports indicated that NVIDIA’s next-generation AI semiconductor, Blackwell, would face a three-month shipment delay due to design flaws, drawing significant investor attention to Blackwell. However, NVIDIA did not disclose specific details on the situation.
NVIDIA’s Chief Financial Officer (CFO), Colette Kress, prepared a statement stating, “We expect Blackwell revenue to reach billions of dollars in the fourth quarter.”
Nevertheless, NVIDIA indicated that it would increase shipments of Hopper, its current leading semiconductor, over the next two quarters, suggesting that Hopper could fill the gap left by Blackwell’s delay.
CEO Jensen Huang expressed optimism in a press release: “Hopper demand remains robust, and we anticipate that Blackwell demand will be unbelievable.”
NVIDIA closed the regular trading session at $125.61, down $2.69 (2.10%). In after-hours trading, the stock initially fell more than 8% but later recovered some losses.
However, the decline that had narrowed to 2% has since widened again.
As of 5:10 PM Eastern Time, NVIDIA’s stock traded at $119.60, down $6.01 (4.78%) from the regular trading close.
