Amid growing concerns about overvaluation and potential market correction, Nvidia’s performance over the last few quarters has captured the attention of investors and analysts alike.
With high stakes and major implications for the broader market, the release of Nvidia’s Q2 earnings report is poised to have a substantial impact on the company’s trajectory and the tech sector as a whole.
The technology sector has experienced a meteoric rise in recent years, with many tech companies achieving impressive growth and profitability. Nvidia has led the pack, accumulating a market capitalization of over US$3 trillion since the launch of ChatGPT in November 2022. Its stock price has also grown by over 160 percent year-to-date. However, this has led to concerns that AI stocks may be overvalued and susceptible to a correction.
Ferragu stated at the time that Nvidia stock is “getting fully valued” and that further growth “will only materialize in a bull case, in which the outlook beyond 2025 increases materially, and we do not have the conviction on this scenario playing out yet.”
By July 30, Nvidia had fallen by a total of 23.1 percent from its highest valuation that month. However, it rebounded the next day, adding US$329 billion to its valuation and ending July with a new record for single-day earnings.
The company cited demand for its Hopper graphic processing units and anticipation for the Blackwell series as drivers of its performance in the second quarter. Data center revenue was US$26.3 billion, up 16 percent from last quarter and 154 percent year-over-year.
Earnings per share came in at US$0.67, 12 percent higher than Q1 and a 168 percent boost from Q2 2024. Both revenue and earnings per share came in above analyst expectations.
Nvidia also announced a second share repurchase authorization worth US$50 billion, adding to the US$7.5 billion remaining from its repurchase authorization in Q1 and bringing the total available to US$57.5 billion.
For its Q3 2025 period, the company projects revenue of around US$32.5 billion, plus or minus 2 percent.
Nvidia’s share price closed at US$125.61. The market’s initial reaction sent Nvidia stock up by over 2 percent immediately after the closing bell, only for it to fall by nearly 10 percent roughly 30 minutes after the report’s release. Its share price at 5:00 p.m. EST was US$120.50, a decline of over 4 percent.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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