Artificial intelligence giant Nvidia Corp. NVDA The company reported earnings in line with expectations after the market closed on Wednesday, and also issued guidance that beat market expectations. The only blemish was a slight decline in profit margins compared to the previous quarter. Despite the strong results, the chipmaker failed to please the market.
What Happened: Nvidia reported second-quarter fiscal 2025 non-GAAP earnings of 68 cents per share on revenue of $30.04 billion, beating market expectations of 64 cents per share and $28.68 billion in revenue. Non-GAAP gross margins fell 3.2 percentage points sequentially to 75.7%, with the company attributing the weakness to inventory reserves for lower-yielding Blackwell material and an increased mix of new products in its data center business.
The company now expects third-quarter sales of $32.5 billion, plus or minus 2%, beating the consensus estimate of $31.69 billion, and maintained its full-year non-GAAP gross margin guidance in the mid-70s range.
Nvidia also announced an additional $50 billion share repurchase program.
Gary Black of Future Fund LLC explained the reason for the drop in stock prices after the earnings report, saying the difference between estimates and the consensus was the smallest in several quarters and came in well below what many investors had expected.
Gene Munster of Deepwater Asset Management suggested the selloff was overdone and that stocks could recover next week. Management didn’t specify whether the Blackwell 200 would be delayed, but the tech venture capitalist said it could be delayed by at least two months.
Nvidia fell 4.47% to $120 in premarket trading on Thursday, according to Benzinga Por data. The stock may pare losses during trading hours as sellers bid higher for the stock. Nvidia’s weakness has rippled throughout the chip ecosystem, hurting semiconductor and chip equipment makers and suppliers.
See also: Best Semiconductor Stocks
Chip Mover:
Advanced Micro Devices Am AI server maker Supermicro Computer Inc. fell 1.66% to $143.93. SMCIThe company, which has been hit hard by short-term reports in the past two sessions, fell 5.30% to $420. Taiwan Semiconductor Manufacturing Co., a supplier and foundry for Nvidia TSMC Micron Technology, Inc. M Broadcom fell 1.66% to $93.29. AVGO Marvell Technology Inc. MRVR ARM Holdings fell 1.01% to $67.75. arm It fell 1.68% to $123.21.
iShares Semiconductor ETF socksan exchange-traded fund that tracks the Philadelphia Semiconductor Index, fell 0.73% to $224.26.
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