AI giant Nvidia (NVDA) reported second-quarter earnings after the close on Wednesday that beat expectations on both revenue and profit, and also provided a better-than-expected outlook for the current quarter.
NVIDIA reported second-quarter adjusted earnings per share of $0.68 on revenue of $30 billion. Analysts were expecting earnings per share of $0.64 on revenue of $28.8 billion. This represents a 122% increase in revenue compared to the same period last year, while earnings increased 168% compared to the same period last year.
The company also gave third-quarter revenue guidance of $32.5 billion, up 2% from analysts’ expectations of $31.9 billion.
The semiconductor giant’s shares fell about 3.5% in after-hours trading after the earnings report, after dropping 6% in the immediate reaction to the earnings announcement.
The bulk of that revenue came from NVIDIA’s pivotal data center business, which posted quarterly revenue of $26.3 billion compared with Wall Street’s expectations of $25 billion — up 154% from the same period last year, when the division made $10.3 billion.
Expectations for the company’s next-generation Blackwell chips are “incredibly high,” CEO Jensen Huang said in a statement.
“Blackwell’s production ramp will begin in the fourth quarter and continue through fiscal 2026. We expect Blackwell’s sales to reach several billion dollars in the fourth quarter,” Chief Financial Officer Colette Kress said in a statement.
Kress’ statement added that the company “made changes to Blackwell’s GPU masks to improve production yields.”
The company expects shipments of its current hopper chips to “increase” later this year.
Nvidia also said Wednesday it was increasing its share repurchase authorization by $50 billion. The company had $7.5 billion left at the end of the quarter.
Nvidia’s gaming division, once the company’s biggest cash cow, saw revenue grow 16% year over year to $2.8 billion.
Nvidia is the global leader in AI chip design and software, controlling 80% to 95% of the market, according to Reuters.
The company also holds the keys to Wall Street’s current AI trading, with nearly half of its revenue tied directly to tech giants like Microsoft, Amazon, Google, and Meta.
Nvidia’s rivals aren’t resting on the status quo: Earlier this month, AMD announced it was acquiring ZT Systems for $4.9 billion, a move that gives AMD more leverage in building AI system servers, a big driver of Nvidia’s own sales.
The story continues
And while this may translate into increased sales for AMD, it doesn’t mean that Nvidia faces any major threat to its status as AI king anytime soon.
“You’re seeing emerging competitors like AMD slowly start to gain market share,” Stifel Managing Director Reuben Roy told Yahoo Finance on Monday. “But when you look at the overall infrastructure spending cycle… which we think will continue to increase, NVIDIA seems best positioned to benefit.”
Contact Daniel Howley at dhowley@yahoofinance.com and follow him on Twitter: @DanielHowley.
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