Nvidia slides after Q2 data center sales miss estimates

Nvidia’s second-quarter results are out, and it’s a top- and bottom-line beat:

However, you’ll note that the sales beat is not due to any positive surprise in its data center business, which modestly missed expectations. The knee-jerk reaction: the stock is sliding, down 4%.

CEO Jensen Huang called demand for the Blackwell platform “extraordinary,” and no doubt investors will be listening closely during the earnings call to see how much this data center revenue shortfall is a function of supply constraints and when these can be overcome.

Guidance for the current quarter is a little ahead of estimates.

This outlook does not include any expected H20 sales to China, per management.

Nvidia’s fiscal second quarter was a tumultuous and momentous period for the chip designer. Export curbs introduced in mid-April effectively locked the company out of China’s AI market. Nvidia’s public and private pressure campaign to regain access to this market ultimately bore fruit, but the company did not receive any export licenses for the H20s until the quarter was over.

Despite this, Nvidia managed to become the first $4 trillion company by market cap during its fiscal Q2, as receding recession fears and hyperscalers’ renewed commitment to their AI capex binges buoyed the chip designer to never-before-seen heights.