Nvidia bests Q2 earnings consensus, revenue tops $30 billion, but gross margin slips

• Nvidia stock slips 7% despite Q2 earnings beat.
• Nvidia delivered adjusted EPS of $0.68 but gross margin fell.
• Revenue above $30 billion topped the $28.73 billion consensus.
• Board approves new $50 billion share buyback scheme.

Nvidia’s (NVDA) second-quarter earnings results were a beat. After the market close, the leading maker of chips for the artificial intelligence (AI) industry bested the Wall Street consensus handily.

NVDA stock, however, slipped more than 7% afterhours to $115 per share before recovering back near $124.

For the fiscal second quarter of 2025, which ended in July, Nvidia earned $0.68 in adjusted EPS on revenue that topped $30 billion. Revenue rose 122% YoY and 15% from the previous quarter.

Wall Street had expected Nvidia to deliver $0.64 in adjusted earnings per share (EPS) on revenue of $28.73 billion with a 75.5% gross margin.

The post-market event, the biggest of the week, transpired on a day when the NASDAQ slipped 1.2%, the S&P 500 dropped 0.6%, and the Dow Jones ended the regular session 0.4% lower. Despite that, Charles Schwab released a survey showing that retail traders now showcase their highest level of optimism in two years due to expected interest rate cuts.

“Hopper demand remains strong, and the anticipation for Blackwell is incredible,” said CEO Jensen Huang in a statement. “Nvidia achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”

Huang also said that the company had begun shipping samples of its new Blackwell GPU to customers.

The weak data point was the gross margin, which fell below consenus of 75.5% to 75.1% in the quarter. This was starkly off Q1's gross margin of 78.4%.

Management said that gross margin would remain at 75% in the third quarter and told shareholders to expect $32.5 billion in sales for the coming quarter.

Nvidia by segment

Nvidia's segment revenue continued to rely largely on the data center industry. That segment showed Q2 sales of $26.3 billion, up 16% from Q1 and up 154% from a year prior.

Gaming revenue of $2.9 billion, gained 9% from the previous quarter and increased 16% YoY.

The professional visualization segment saw sales of $454 million, which was a more meager addition of 6% over Q1 and 20% over the year prior.

Automotive segment sales rose 5% from Q1 and 37% from a year prior to $346 million.

Nvidia stock chart

After intially collapsing afterhours, NVDA stock recovered much of the losses but remained well below the Tuesday closing price of $128.30. Shares already had lost 2.1% during the regular session. They appear likely to lose at least 2% more afterhours.

Much, however, will depend on the earnings call from Huang, who has a way of bending the market around his vision.

For more technical analysis, see here.

NVDA 1-minute chart from afterhours on 8-28-2024