NVIDIA Exceeds Q2 Earnings Expectations... $50 Billion Share Buyback (Update)

Q3 Sales Guidance Exceeds Expectations
Latest AI Chip 'Blackwell' Scheduled for Q4 Release
Shares Fall Over 4% in After-Hours Trading

NVIDIA, buoyed by surging demand for data center chips, announced second-quarter results that exceeded market expectations along with a $50 billion (approximately 67 trillion KRW) share repurchase plan. The latest artificial intelligence (AI) chip, 'Blackwell,' is scheduled for release in the fourth quarter as planned. However, despite the better-than-expected earnings and third-quarter guidance, NVIDIA's stock price fell more than 4% in after-hours trading.

[Image source=Yonhap News]

On the 28th (local time), NVIDIA announced its fiscal 2025 second-quarter (May to July) results after market close, reporting revenue of $30.04 billion and net income of $16.6 billion. This represents a 122% and 168% increase year-over-year, respectively. The second-quarter earnings per share (EPS) stood at $0.68.

These results surpassed market expectations. Earlier, market research firm LSEG had forecast NVIDIA’s second-quarter revenue at $28.7 billion and EPS at $0.64.

The surprise earnings were driven by the data center business. Including AI processors, data center revenue surged 154% year-over-year to $26.3 billion. The data center segment accounted for 88% of total revenue. Most of NVIDIA’s revenue came from a handful of cloud service and consumer internet companies such as Microsoft (MS), Alphabet (Google’s parent company), Meta (Facebook’s parent company), and Tesla. NVIDIA’s AI chips, H100 and H200, are widely used to power generative AI functions like OpenAI’s ChatGPT.

Gaming business revenue rose 16% year-over-year to $2.9 billion. The gaming segment was NVIDIA’s main business before the data center revenue surge.

NVIDIA also provided third-quarter (August to October) guidance that exceeded market expectations. The company forecasts revenue of $32.5 billion for the quarter, surpassing analysts’ estimates of $31.77 billion.

The latest AI chip, 'Blackwell,' which had raised concerns about delayed release, is confirmed for launch in the fourth quarter.

Colette Kress, NVIDIA’s Chief Financial Officer (CFO), said, "We shipped Blackwell chip samples this quarter and made some product changes to improve manufacturing efficiency," adding, "We expect to generate billions of dollars in revenue from Blackwell chips in the fourth quarter."

Additionally, NVIDIA announced approval of a $50 billion share repurchase program.

However, despite the better-than-expected second-quarter results and third-quarter guidance, NVIDIA’s stock price was down 4.3% in after-hours trading as of 4:53 PM on the same day.