Nvidia's quarterly report, released on August 26, was a powerful catalyst for a reversal in the company's shares (NVDA). Despite an initial drop in quotes, the stock not only recovered but also demonstrated confident growth of more than 4% in after-hours trading. Key metrics significantly exceeded analyst consensus forecasts, suggesting that the correction phase has come to an end.
Revenue for the reporting period reached $96.2 billion, while Wall Street expectations were at $92.2 billion. The company's sales more than doubled compared to the same period last year. Adjusted earnings per share (EPS) came in at $2.22, beating the forecast of $2.10. Notably, the initial market reaction was negative—shares briefly dipped to $205, but a rapid reversal followed, and soon quotes jumped to $219.12, corresponding to a gain of 4.51%.
Data Center segment sets records
The main growth driver remains the Data Center segment, whose revenue reached $89 billion against a forecast of $85.8 billion, up 117% year over year. Sales to "hyperscalers"—the largest cloud providers—were particularly telling, bringing in $48.71 billion, significantly above the expected $43.55 billion. This indicates sustained high demand for artificial intelligence (AI) computing power from key market players.
Gross margin remained stable at 75%, fully in line with forecasts. The company's net profit rose 118% to $54 billion, while free cash flow amounted to $21.3 billion. Such impressive financial results dispel concerns about a possible AI bubble and excessive concentration of demand among a limited circle of clients.
Third-quarter guidance exceeds expectations
Company management gave an optimistic forecast for the current quarter, expecting revenue of $108 billion (plus or minus 2%). This guidance came in above both the analyst consensus forecast ($104.2 billion) and informal trader expectations, which ranged between $107–110 billion. Notably, this forecast does not include revenue from sales of data center computing solutions in China.
The volume of mandatory purchases surged sharply—from $119 billion to $279 billion, primarily driven by memory supply contracts. At the same time, the gross margin forecast was slightly lowered to 74%. The company also confirmed that the new Vera Rubin platform, which inherits the Blackwell architecture for AI systems, is moving into full-scale production, with server racks already operating at partners' facilities.
"AI has reached an inflection point. It is already delivering value. AI tokens are generating profits. Now computing is producing revenue," CEO Jensen Huang said, describing current demand.
Has the curse of Nvidia's earnings reports been lifted?
Over the past four quarters, Nvidia shares fell after earnings releases, even despite beating expectations. Investors had grown cautious: ahead of the report, the stock showed a seven-day decline, and semiconductor charts displayed similar triangular patterns, indicating uncertainty. However, this time the scenario changed.
The initial sell-offs, which fit the pattern, were quickly bought up. Within minutes of the release, buyers began actively building positions, and by the start of the press conference, gains exceeded 4%. The revenue guidance of $108 billion surpassed even the most optimistic expectations. The situation was compounded by the fact that Nvidia and Micron account for a third of all earnings growth on Wall Street, making the report critically important for the entire market.
My analysis: The stock reversal after the earnings report is a strong bullish signal that may indicate the exhaustion of correctional pressure. However, the key factor for further dynamics will be management's comments on memory costs and the launch timeline for the Rubin platform. If these aspects are positive, the rally in quotes could continue right up to the market open on Thursday. Investors should closely monitor these signals.