NVIDIA Slightly Exceeds Q2 Expectations…Shares Weaken in After-Hours Trading

NVIDIA, the leading artificial intelligence (AI) company, saw its stock weaken in after-hours trading. The company posted strong results that only slightly exceeded expectations, which fell short of investors’ heightened hopes.

On the 27th (local time), NVIDIA announced second-quarter (May–July) revenue of $46.74 billion (₩65,155.5 billion) and earnings per share of $1.05 (₩1,463), respectively.

This slightly surpasses the Wall Street average compiled by research firm LSEG, which expected revenue of $46.06 billion and EPS of $1.01.

Revenue increased 56% compared to the same period last year. Net profit was $25.78 billion, up 59% year-on-year.

NVIDIA projects third-quarter revenue to reach $54 billion, more than a 50% increase over the same period last year. This figure does not include sales of the H20 chip to China.

Most of NVIDIA’s revenue comes from its data center division, which includes graphics processing units (GPUs). This segment recorded $41.1 billion in sales, a 56% increase year-on-year.

Although there were no H20 chip sales to China in Q2, NVIDIA announced that it sold $180 million worth of H20 chip inventory to customers outside of China. The export of H20 chips to China was restricted by the Donald Trump administration in April, but sales resumed following approval in July.

NVIDIA’s robotics segment grew 69% to $586 million in the second quarter. Robotics is an area where NVIDIA sees the greatest growth opportunity going forward. Jensen Huang, CEO, stated, “After AI, robotics could be the next biggest growth market,” indicating a focus on this sector.

NVIDIA shares dropped 0.09% in regular trading on the New York Stock Exchange overnight. After the earnings announcement, shares are currently down about 2.7% in after-hours trading, at one point dropping more than 5%.

Seo Sang-young, a researcher at Mirae Asset Securities, noted, “Ahead of the earnings release, Wells Fargo maintained its ‘overweight’ investment rating in a report, but shares ended flat. In particular, as Cambricon Technology—recognized as NVIDIA’s competitor in China—returned to profitability aided by the Chinese government’s AI push, concerns over NVIDIA’s weak performance in the Chinese market acted as a burden.”

He added, “After market close, data center revenue came in at $41.1 billion, below expectations of $41.3 billion. Furthermore, results falling short of market hopes also proved challenging. However, the rebound in buying limited further declines.”

Shin Min-kyung, Hankyung.com journalist radio@hankyung.com