Nvidia Apple posted strong second-quarter earnings on Wednesday — but it wasn’t enough to satisfy the high expectations of some on Wall Street.
The company’s stock, which is known to be highly volatile following its earnings, fell more than 5% in after-hours trading after the company failed to meet analysts’ highest expectations for third-quarter revenue guidance.
But the company showed that spending on AI remains strong.
The chipmaker posted revenue of $30.04 billion in the latest quarter, beating the consensus estimate of $28.86 billion. However, revenue was lower than recent quarters.
The company also beat guidance estimates, reporting that it expects to generate revenue of about $32.5 billion in the third quarter, compared to the average estimate of $31.77 billion.
But the third-quarter revenue forecast fell short of some of the highest expectations for the third quarter, or the “whisper number” on Wall Street that some analysts had hoped the company would reach. Dan Morgan, an investor in Synovus, said the Wall Street “whisper number” was between $33 billion and $34 billion.
Anticipation was high for Nvidia’s earnings, as the company has become a barometer for the broader AI industry.
The big question on everyone’s mind has been the status of Blackwell’s long-awaited chips, the next generation of Hopper GPUs that tech companies have been itching to get their hands on. Recent reports of a potential delay in Blackwell’s rollout have raised concerns about the potential impact on the industry.
Nvidia CEO Jensen Huang said demand for Blackwell processors has been “amazing” and the company said it expects to generate “multi-billion” in revenue from sales of the new chip architecture in the fourth quarter. But it also acknowledged that production issues related to Blackwell processors weighed on gross margins last quarter.
“We shipped customer samples of our Blackwell architecture in the second quarter,” Nvidia’s CFO said in prepared remarks.
“We have made a change to Blackwell’s GPU mask to improve product productivity. Blackwell production is scheduled to begin in Q4 and continue through fiscal 2026,” she added.
Huang said demand is still “very strong” for Nvidia’s current Hopper chips, and that AI companies are looking to deploy their capital and build their data centers now with what’s currently available.
In response to analyst questions, Nvidia’s CEO said the company is seeing “accelerating momentum in generative AI.”