#NVIDIAEarnings

NVIDIA Earnings: $30 Billion Quarter Tests AI Rally At $81k BTC Peak

NVIDIA posted fiscal Q2 revenue of $30.04 billion, up 122% year over year, beating Street view of $28.7 billion. Data center alone hit $26.3 billion, up 154% year over year. Gross margin held at 75.1%, net income hit $16.6 billion, and EPS landed at $0.68 vs $0.64 expected. Yet share fell 3% after hours. Why? Guidance.

The firm guided Q3 revenue to $32.5 billion, plus or minus 2%, just a touch above consensus at $31.7 billion. For a stock priced for a blowout, a mere beat is not enough.

Where Growth Came From

Three drivers carried quarter.

First, H100 and H200 ramp. Over 900,000 H100 equivalent units shipped, with H200 now 35% of data center mix. Price for H200 hovers near $35k per chip, with cloud firms paying premium for supply.

Second, sovereign AI. Deals with Japan, France, and Middle East buyers added $1.9 billion of sales, up from $0.4 billion a year ago. This buyer base is new and less price sensitive.

Third, networking. InfiniBand and Spectrum-X sales hit $3.7 billion, up 112%, as data center owners buy full rack, not just chip.

Inventory rose to $5.4 billion from $4.2 billion, a sign that Blackwell B100 is being built ahead of Q4 volume ship. Blackwell is now in sample to Microsoft, Amazon, and Google, with first revenue seen in October.

Why Market Sold Despite Beat

Cost is rising. Operating expense rose 33% to $3.9 billion on R&D for next gen Rubin platform. Supply chain cost for HBM3E lifted COGS, and margin is seen slipping to 74.4% in Q3 from 75.1% now.

Also, large cloud buyers have now bought so much that their spend growth is slowing. CapEx for top four US cloud firms rose 52% year over year in this quarter, but is guided to rise only 28% next quarter. NVIDIA growth is capped by how much cloud can absorb.

Client concentration also worries. Over 46% of revenue comes from four buyers. Any pause from one buyer can swing quarter.

Macro Backdrop That Framed Print

This print landed as BTC broke $81k, gold held above $2,650, US 10-year yield held near 4.70%, and US Dollar Index closed week lower. Risk appetite is high, but tolerance for any blemish is low. Treasury buyback of $4 billion per week keeps liquidity soft, which helps growth stock, but it also lifts bar for earnings.

If NVIDIA holds $32.5 billion guidance and Blackwell ramp starts in Q4 with $6 to $7 billion of extra sales, fiscal year revenue can top $120 billion, double last year. That still supports a forward P/E near 31x, rich but not stretched versus 122% growth.

Next test is October. If Blackwell ships on time and gross margin holds above 74%, bear thesis of peak AI spend loses power. If Blackwell slips or margin dips below 73%, pullback could deepen and drag whole AI cohort with it.