Nvidia blows past expectations with record Q2 earnings but shares fall

But with expectations leading up to Nvidia’s earnings results running red hot, shares of the company fell about 6% in after hours trading on Wednesday.

Nvidia reported $30 billion in revenue in the three months ending July 28, up 122% from the year-ago period and well above the $28.9 billion expected by analysts, according to Bloomberg estimates. The results were driven by sales of Nvidia’s Hopper GPU, the company said. The strong demand for Nvidia’s chips boosted the bottom line, with the chipmaker delivering gross profit margins of 75.1% and adjusted earnings per share of 68 cents.

CFO Colette Kress said in prepared remarks that the company “executed a change to the Blackwell GPU mask to improve production yield,” and said that the company would ramp production in the fourth quarter of the year.

It’s unclear if the change relates to design flaws reported by tech news site The Information earlier this month, which the publication said would delay shipments by three months or more. The timeframe is within the company’s previous commitment to ship Blackwell in the second half of the year, albeit at the back end of the date range.

“In the fourth quarter, we expect to ship several billion dollars in Blackwell revenue. Hopper demand is strong, and shipments are expected to increase in the second half of fiscal 2025,” Kress said.

Nvidia has been one of the biggest beneficiaries of the AI craze, as internet companies like Google, Meta, and Amazon spend tens of billions of dollars on the infrastructure to provide AI services. 

While Nvidia faces competition from rival chipmaker AMD and startups including Cerebras and Groq, the company currently controls 90% of the market for AI chips, according to analysts.  That dominance has fueled a massive rally in the company’s stock, which has more than doubled this year and now represents nearly 7% of the S&P 500.