Stocks pulled back in the extended session as Nvidia’s highly anticipated earnings failed to deliver the kind of blowout numbers some investors hoped for. Despite solid results, the bar was set too high. Nvidia’s drop in the overnight market dragged tech sentiment, putting broader equity indexes on edge as traders recalibrate expectations.
At 20:36 GMT, Nvidia Corp is trading $177.25, down $4.35 or -2.39%. On Wednesday, the stock settled at $181.60, down $0.17 or 0.094%.
Nvidia reported Q2 adjusted earnings per share of $1.05 on $46.74 billion in revenue, narrowly topping analyst estimates of $1.01 and $46.06 billion respectively. But shares slipped 2.5% after-hours to $177.16, as the beat wasn’t convincing enough to sustain its rally. Net income rose 59% to $25.78 billion, while revenue climbed 56%, underscoring strength—but not the kind needed to push through already stretched valuations.
The company’s data center division remains the powerhouse, generating $41.1 billion in quarterly revenue, up 56% year-over-year. This division, largely fueled by hyperscaler demand for AI infrastructure, now contributes the majority of Nvidia’s business. Blackwell chip sales—its flagship AI product—rose 17% sequentially, continuing to drive investor confidence in future hyperscaler spending.
Notably absent from this quarter’s revenue was the H20 chip, which Nvidia couldn’t sell to China due to export restrictions. A meeting with former President Donald Trump may pave the way for future shipments, but this quarter included a $4.5 billion write-down related to the chip. Nvidia released $180 million worth of H20 inventory to a customer outside China, suggesting there’s still strong demand—but geopolitical headwinds remain a key risk to forward guidance.
Nvidia forecasts Q3 revenue of $54 billion, slightly above consensus estimates of $53.1 billion. The guidance excludes any potential H20 sales to China. While the outlook is positive, it lacks the upside surprise traders were hoping for to reignite momentum across AI-focused names. With Nvidia now accounting for 8% of the S&P 500, its performance heavily influences broader indexes.
While Nvidia’s results reaffirm its dominance in AI chips, they fall just short of the kind of upside surprise that typically catalyzes broad tech rallies. The path forward now hinges on whether hyperscaler capex continues at current levels and how quickly H20 shipments to China can resume. Traders should also monitor signals from Washington on export policy and any updates from hyperscaler earnings for cues on sector rotation and broader index direction.
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James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.
