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Nvidia Smashes Q2 Expectations, Projects Strong Q3 Growth Amid AI Market Dominance

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Nvidia (NVDA) announced its second-quarter earnings after the market closed on Wednesday, surpassing expectations on both revenue and profit, with a strong outlook for the current quarter. The company reported adjusted earnings per share of $0.68 on revenue of $30 billion, exceeding analysts’ forecasts of $0.64 EPS and $28.8 billion in revenue. This represents a 122% year-over-year increase in revenue and a 168% rise in earnings from the same period last year.

Looking ahead, Nvidia provided third-quarter revenue guidance of $32.5 billion, plus or minus 2%, surpassing analysts’ expectations of $31.9 billion. Despite the positive results, Nvidia’s stock fell by 3.5% in after-hours trading and dipped as much as 6% immediately following the announcement.

Nvidia’s data center business was the primary driver of its revenue, generating $26.3 billion in the quarter, significantly outpacing Wall Street’s expectation of $25 billion. This marks a 154% increase from the $10.3 billion reported in the same quarter last year.

CEO Jensen Huang expressed excitement about the upcoming Blackwell chip, stating that anticipation is “incredible.” CFO Colette Kress added that Blackwell production is set to begin in the fourth quarter and will continue into fiscal 2026, with expectations to generate several billion dollars in revenue in the fourth quarter alone. Kress also noted that Nvidia made changes to the Blackwell GPU mask to enhance production yield. Meanwhile, shipments of Nvidia’s current Hopper chips are expected to “increase” in the second half of the year.

In addition to its earnings, Nvidia announced a $50 billion increase in its share buyback authorization, with $7.5 billion remaining from its previous authorization at the end of the quarter.

Nvidia’s gaming division, once the company’s main revenue source, reported $2.8 billion in revenue, a 16% increase year over year.

As the global leader in AI chip design and software, Nvidia controls between 80% and 95% of the market, according to Reuters. The company is a key player in the AI sector on Wall Street, with nearly half of its revenue linked to major tech firms like Microsoft, Amazon, Google, and Meta.

Nvidia’s competitors are also making moves. Earlier this month, AMD announced its acquisition of ZT Systems for $4.9 billion, bolstering its capabilities in building AI system servers, a sector that has been a significant driver of Nvidia’s sales.

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