Nvidia earnings smash, but market sends mixed signal

Wall Street held its breath heading into Nvidia’s Q2 release, and the chip giant didn’t disappoint on paper.

Revenue exploded to $46.7 billion, well above the ~$44 billion expected, and EPS cleared consensus with room to spare. Data-center revenue, the crown jewel of Nvidia’s AI empire, surged to nearly $28 billion. For most companies, that would be a dream quarter.

But markets don’t always reward perfection. Despite the blowout numbers, Nvidia is slipping in pre-market, trading at $178.36. Why? 

Profit-taking explains some of it, but the bigger question looming over every trader’s screen is China.

Beijing has drawn a line, limiting purchases of Nvidia’s high-end H20 chips, while simultaneously nurturing homegrown challengers. Huawei’s Ascend and Cambricon might look like minnows compared to Nvidia today, but with state backing and control of critical rare earths like Neodymium, their threat could grow rapidly.

And here’s the twist: while Nvidia pulled back, the S&P 500 pushed into new all-time highs. The market is saying “yes” to AI, but not blindly “yes” to Nvidia. That divergence sets the stage for today’s tug of war.

Nvidia technical outlook

The chart tells its own story. After an ugly breakdown earlier this month, Nvidia found footing in the $170 to $174 demand zone and staged a bounce. Now it’s staring down the $182 to $183 supply shelf, a battleground where rallies have been rejected before.

This is a knife’s-edge moment. A close above $183.3 would unlock room to run into the $192 to $195 zone, completing a measured move of 6.7% as estimated by the options market.

Fail here, and Nvidia risks tumbling back toward $170, the opposite end of the 6.7% projection.

S&P 500 technical outlook

The index is playing a different game. The S&P 500 has been grinding higher inside a rising wedge, shrugging off concerns and climbing as traders rotate into broader AI exposure.

The SPX could throttle toward the $6,500s, where the wedge’s upper trendline is waiting. That zone could act as a rejection point if momentum continues to thin.

If the wedge eventually breaks lower, a move back into the $6,200–$6,240 region would not be surprising — the technical target of the rising wedge — with deeper tests toward the anchored VWAP near $5,959 still on the table in a broader correction.

Closer support sits at $6,372.02, the point of control and highest traded volume area of the 2025 rally. Beneath that, our rising wedge target of $6,200, and beyond that lies the 2024 all-time high around $6,150.

But for now, the index remains bid. Traders should be wary that new highs are coming on weaker fuel (forming a bearish RSI divergence), and this wedge will not stay tight forever.

Bigger picture

This is where it gets interesting.

Nvidia is still the AI king, but markets are starting to treat it more like a single chapter than the whole book.

Bulls highlight the resilience: record-breaking revenue despite losing Chinese customers. Bears highlight the cracks: weak China sales, export bans biting, and state-backed rivals waiting to scale.

Meanwhile, SPX shows what the market really believes. AI is here to stay. The theme is so powerful that even Nvidia selling off couldn’t stop the index from printing a fresh record. That tells us money is flowing into the story, just not all of it into the same stock.

For traders, the playbook is simple but critical. Watch Nvidia at $183 and $170. These are the gates. A breakout, or a retest, will decide the next chapter. Until then, enjoy the drama but don’t get caught in the noise.