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. When he doesn’t speak loud enough, apparently the market throws a tantrum.
So here’s what happened: NVIDIA just dropped another monster earnings report that would make most CEOs weep with joy. Revenue jumped 56% year-over-year to $46.7 billion (with a B), and earnings per share hit $1.05 – beating estimates by 4%. Their data center business alone pulled in $41.1 billion, which is more than most countries’ GDP.
But here’s the kicker – the stock actually dropped after these results. Why? Because Wall Street is basically that friend who complains their A+ should have been an A++.
The “Disappointment” That Wasn’t
Analysts were hoping for $41.3 billion in data center revenue instead of $41.1 billion. Let me put this in perspective: NVIDIA missed by $200 million on a $41 billion number. That’s like being upset your lottery winnings were $41 million instead of $41.2 million. The audacity!
Plus, their China-specific H20 chips aren’t even shipping yet, but once they do, that’s potentially another $3-5 billion per quarter. Jensen Huang basically said they’re “fired back up” to sell to China again, which sounds like tech bro speak for “we’re about to make even more ridiculous money.”
Why the Stock Dropped (Spoiler: It’s Not Fundamentals)
Here’s where it gets interesting. The drop had nothing to do with NVIDIA’s actual business and everything to do with options shenanigans. About 42% of NVIDIA options are daily contracts, and the big market makers like Citadel basically said “nope” to letting the stock moon after earnings.
Think of it like this: the house always wins in Vegas, and these guys are the house. They’ve been selling calls to retail investors all quarter, making bank on premiums, and they’re not about to let those calls print money.
The Real Story
NVIDIA is still the undisputed king of AI. They’re projecting $54 billion in revenue for next quarter (and that’s without counting China sales). Huang mentioned seeing “$3-4 trillion in AI infrastructure spend by the end of the decade.” That’s not a typo – trillion with a T.
The company now represents 3.6% of global GDP growth. It’s bigger than entire stock markets of major countries. There’s no “Magnificent Seven” anymore – it’s just NVIDIA and six other companies trying to keep up.
The Bottom Line
This earnings dip is like finding a Rolex on sale because the box has a tiny scratch. NVIDIA’s fundamentals are rock solid, their moat is deeper than the Mariana Trench, and they’re basically printing money faster than the Federal Reserve.
Sometimes the market gets weird about perfect earnings. Sometimes options traders ruin the party. But sometimes that creates the perfect buying opportunity for anyone who can see past the noise.
NVIDIA isn’t going anywhere except up – eventually. The AI revolution is just getting started, and they’re still the only game in town that matters.