Why is Nvidia's share price falling?

Nvidia's Quarterly Results

Nvidia reported Q2 2025 earnings after the market closed on Wednesday 28th August 2024.

It was one of the most anticipated as Nvidia was the fastest company to move from 2 Trillion to 3 Trillion market cap and is a heavy weight in both S&P 500 and NASDAQ 100 index.

Quick Look at Nvidia Q2 2025 numbers:

• record revenue of $30 billion, which is a 15% increase compared to the previous quarter and a significant 122% increase year-on-year.

• Data center revenue reached a record $26.3 billion, which is over 154% YOY increase. Driven primarily by strong demand for GPU computing and networking platforms from those investing in AI/Cloud infrastructure.

• EPS: 68 cents vs 65 cents as market expected, up 152%.

• Buyback: $50 billion stock buyback.

  What were the positives from Nvidia's quarterly results

• Beat Market expectations both on EPS and Revenue front.

• Strong outlook: Slight increase in revenue and similar margins are expected, which is a good sign.

• Strong demand for the next generation of AI chips: Blackwell.

• Continued positive outlook on maintaining a strong hold of the market share in GPU chips.

• There are no design flaws in blackwell. The issue was with the production of blackwell. Nvidia is on track to start shipping them. Nvidia has already started shipping samples of Blackwell to some partners and customers.

  Why did Nvidia's share price fall?

  Though Nvidia did beat market expectations on both EPS and revenue, Nvidia's share price fell after the results.

  There are 4 main reasons why Nvidia's stock price is falling.

  1. Surprise. But not a HUGE surprise: Though Nvidia did surprise the market with the Q2 numbers, the surprise wasn't big enough for the stock price to breakout and move up. Compared to previous quarters, the surprise wasn't big enough.

  2. Margins Decline: There was a slight decline in the margin.

  3. No Clear Figures on Blackwell Revenues: The management refused to put a number on the revenues that might come from blackwell chip.

  4. AI ROI: There are also concerns whether there will be continued investment in AI and concerns around the return on investment that would justify the investments from Nvidia's customers to continue investing in AI.

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