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Nvidia (NVDA) released its second quarter earnings report after the market close on Wednesday, topping analyst expectations on both the top and bottom lines. Despite this strong performance, the results failed to impress investors, sending the company's shares lower in after-hours trading.
Yahoo Finance tech editor Dan Howley breaks down the details, exploring the top three reasons why the semiconductor giant's sixth consecutive earnings beat was not enough to drive markets or broadly impress investors this time around.
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This post was written by Angel Smith
Our top story today. Nvidia reported its sixth consecutive earnings beat after the closing bell on Wednesday, and that's thanks to ongoing demand for its AI chips. Shares, however, are fallen, as Alicia Keys would say, down by about 3% after the chipmaker said it expects third-quarter revenue to come in around $32.5 billion. More on why this is a key concern for investors and broader markets. We've got our very own tech editor here at Yahoo Finance, Dan Howley. Hey, Dan.
Yeah, there were, uh, three things that investors really didn't seem to like from the earnings. The first was the street seemingly wanted a bigger beat, and sometimes your best just isn't enough, right? And so that's seemingly what we saw from Nvidia here. They beat on expectations, they beat, uh, on guidance, and still, we saw shares drop as much as 6% at one point, uh, immediately after the earnings announcement. Now they're down, uh, just around, uh, 3%, a little more, uh, than that. And, and you know, I think it comes down to the fact that they just weren't the exciting, stellar, blow-away kind of results that we had seen the prior quarters. And ahead of the earnings, I had kind of spoken about how investors may see a beat of 100% and not be as ecstatic. Uh, if you look at the data center revenue, uh, growth from the prior quarters, we've seen 400% plus growth. It's tough to go from 400 to 200 or so, or 100 or so, and then still feel excited. They're still growing though. The other thing, uh, that I think, uh, Wall Street is looking at is the Blackwell delays. And so the information reported there were delays. Now they, uh, said, uh, CEO Colette Kress has said that they made some changes to the mask of the chip itself. Uh, Jensen Huang said, "Look, it's, it's out there. It's sampling, uh, it's working. Uh, we're going to get it out there." Uh, here's, here's what he had to say.
We executed a change to the Blackwell GPU mask to improve production yields. Blackwell production ramp is scheduled to begin in the fourth quarter and continue into fiscal year 2026. In Q4, we expect to ship several billion dollars in Blackwell revenue.
So that's Colette Kress, uh, CFO, uh, several billion dollars in revenue. But that brings us to the third thing. There wasn't a lot of clarity. Uh, analysts on the phone, uh, had asked what that means exactly. How many billions of dollars can they expect? What's, what's going on there? Uh, and there was no real answer from Kress or Huang. And so, uh, I think some people were expecting, you know, "Give us a number, give us an idea as to what the excitement, uh, around the chip is." But that was a no-go so far. So they say that they'll have it, uh, in Q4, uh, those billions in revenue. I think now it's just a matter of waiting to see what that finally looks like when they do put that number out.
And that lack of clarity likely contributing to the share declines today. Nvidia shares down about 3%. Thank you so much, Dan, for the breakdown.