Nvidia's quarterly report, released on August 26, served as a trigger for a powerful reversal in the company's stock. Despite an initial decline, NVDA shares not only recovered but moved solidly into positive territory, posting gains of more than 4% in after-hours trading. This is a signal the market had been waiting for for months.
Revenue for the second fiscal quarter reached $96.2 billion, significantly exceeding the Wall Street analyst consensus forecast of $92.2 billion. The company's sales more than doubled compared to the same period last year. Adjusted earnings per share came in at $2.22 versus the expected $2.10, further confirming the strength of the giant's operating model.
The key driver was the Data Center segment, which brought in $89 billion in revenue against a forecast of $85.8 billion. The 117% year-over-year growth in this segment finally dispels skepticism regarding a bubble in the field of artificial intelligence. Sales to so-called "hyperscalers"—the largest cloud providers—reached $48.71 billion, also exceeding market expectations.
Third-quarter guidance surpassed even the "rumors"
Company management provided revenue guidance for the current quarter of $108 billion (plus or minus 2%). This is above the consensus of $104.2 billion and aligns with the upper end of unofficial trader expectations, which had discussed a range of $107–110 billion. Notably, the guidance does not include shipments of data center computing solutions to China, leaving room for additional upside.
The gross margin remained at a high level of 75%, while the volume of mandatory purchases increased from $119 billion to $279 billion, indicating colossal demand for Nvidia's products. The company also confirmed that the Vera Rubin architecture, the successor to the Blackwell line, is moving into mass production.
The initial market reaction repeated the scenario of the previous four reports: shares briefly fell to $205. However, this time the "earnings curse" was broken. Just a few minutes after the release, active buying began, and by the start of the press conference, gains exceeded 4%, reaching $219.12.
The capital return program also provided support to the stock: during the quarter, Nvidia returned about $26 billion to shareholders and retains the ability to buy back approximately another $99 billion worth of shares.
My view: This report is a crucial marker not only for Nvidia but for the entire semiconductor market, which, together with Micron, accounts for a third of the earnings growth of the S&P 500 index. Confident guidance and rising orders remove short-term risks, but comments from management on memory prices and the pace of the Rubin ramp will be the key factors for further dynamics. If these signals prove positive, we could see a sustained move higher until the market open on Thursday.