Shares In Nvidia Fall, Despite Record Profits, Sales

Nvidia has delivered a stunning set of financial results that showcased its dominant position as the leading supplier of in-demand chips for the artificial intelligence (AI) sector.

Both profits and revenues for the GPU powerhouse had risen over 100 percent during its most recent quarter, yet shares in the firm fell 4.1 percent after not quite meeting the lofty expectations of investors who had been hoping for higher growth rates.

Last month it was reported that Nvidia was developing a version of its Blackwell AI chip line for China that would be compatible with US export controls, as it seeks to retain sales in a key market.

Q2 financials

Digging into the second quarter results, it is clear that financially speaking Nvidia is profiting greatly from its market position.

For the second quarter ending 28 July, Nvidia posted net profit up a staggering 168 percent at $16.6bn, from $6.2bn in the same year-ago quarter.

Revenue for the quarter was up 122 percent at $30bn from $13.5bn, beating investor estimates of $28.7bn.

This was the fourth straight quarter of triple-digit revenue growth, but the 122 percent Q2 sales growth was down from the previous three consecutive quarters, where growth rates exceeded 200 percent.

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

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“Blackwell samples are shipping to our partners and customers,” Jensen added. “Spectrum-X Ethernet for AI and Nvidia AI Enterprise software are two new product categories achieving significant scale, demonstrating that Nvidia is a full-stack and data centre-scale platform. Across the entire stack and ecosystem, we are helping frontier model makers to consumer internet services, and now enterprises. Generative AI will revolutionise every industry.”

Share buybacks

During the first half of fiscal 2025, Nvidia returned $15.4 billion to shareholders

Then in 26 August 2024, the Board of Directors approved an additional $50.0 billion in share repurchase authorisation, without expiration.

That decision comes after Nvidia in June had completed a ten-for-one forward stock split, as the firm sought to lower its share price to help new investors acquire shares.

Nvidia’s share price has rocketed in value during the past 12 months, so much so that the firm briefly overtook both Apple and then Microsoft to become the most valuable tech firm in the world, worth over $3 trillion (it is currently worth $2.97 trillion).

Indeed, Nvidia’s shares had risen more than 150 percent this year to date.

But the stock has risen more than 750 percent since the start of 2023, as it benefits hugely from the AI boom.