Remember when Alcoa used to kick off earnings season? Yeah, me neither – that was like a million market cycles ago. These days, NVIDIA basically IS earnings season. When Jensen Huang speaks, the market listens. And boy, did he have some things to say this week.
So here’s the deal: NVIDIA just dropped another monster earnings report, and somehow the stock still managed to take a little tumble. Classic Wall Street logic, right? Let me break down what actually happened and why you shouldn’t panic-sell your shares just yet.
The Numbers Don’t Lie (They’re Pretty Great)
NVIDIA pulled in $46.7 billion in revenue for Q2 – that’s a 56% jump from last year. Their earnings per share hit $1.05, crushing the $0.68 from the same quarter last year. Oh, and they beat analyst expectations on both fronts. So naturally, the stock dropped. Because that makes total sense.
The data center business – you know, the thing that’s basically printing money – brought in $41.1 billion. Analysts wanted $41.3 billion, so apparently missing by $200 million when you’re dealing with numbers this massive is somehow disappointing. It’s like complaining that your lottery winnings were only $999 million instead of $1 billion.
China’s Back on the Menu
Here’s where it gets interesting. Jensen mentioned they’re “fired back up” to sell chips to China again, thanks to some new licenses from the Trump administration. Those H20 chips could add another $3-5 billion per quarter once they start shipping. That’s not exactly pocket change.
For next quarter, they’re guiding for around $54 billion in revenue – and that’s WITHOUT counting any China sales. Jensen called those a potential “bonus on top.” I love a CEO who undersells and overdelivers.
Why the Stock Dropped (Spoiler: It’s Not Bad News)
So why did shares dip after such solid results? Two words: options shenanigans. About 42% of NVIDIA’s options are short-dated calls, and the big market makers like Citadel aren’t exactly thrilled about paying out on those. They’ve been making bank selling calls on NVIDIA, and they’re not about to let a little thing like “good earnings” ruin their party.
This happens all the time during earnings season. It’s like the market’s version of that friend who always finds something to complain about, even when everything’s going great.
The Bottom Line
NVIDIA is still the undisputed king of AI. They’re sitting on what Jensen calls a “$3-4 trillion AI infrastructure opportunity” through the end of the decade. The company makes up 3.6% of global GDP growth – that’s bigger than entire stock markets of major countries.
The post-earnings dip? That’s just noise. The fundamentals are rock solid, the growth story is intact, and they’re still the only game in town when it comes to AI chips that actually matter.
Sometimes the market gets weird about perfectly good news. This is one of those times. But for long-term investors who understand what NVIDIA actually does and why it matters, this little dip might just be a gift.