Nvidia shares gave back their post-earnings gains, falling 5.5% by Friday's close after an initial 6% pop following blowout second-quarter results. CEO Jensen Huang says the sell-off misreads a structural shift in computing demand, not a repeat of past AI jitters.
Nvidia posted revenue that more than doubled from a year earlier to $96.2 billion, beating expectations. Adjusted earnings per share jumped 120% year over year to $2.22, above the $2.09 analysts anticipated.
Adjusted net income reached $54 billion, a year-over-year increase of $29.2 billion — an increase roughly equal to Apple's entire second-quarter net income, according to Motley Fool analyst Jeremy Bowman. Nvidia also projected 70% revenue growth in 2027, well above the 44% analysts had forecast.
The results initially lifted shares 6% higher on Thursday, with an intraday high of $230.39, a 9.9% gain. Yet by the end of trading Friday, shares had fallen 5.5%, leaving them barely above their pre-earnings close — the same pattern that followed each of Nvidia's last four blowout earnings reports.
Huang argues the reversal misjudges what is driving Nvidia's growth. According to Motley Fool: "This time is different because this is not demand-driven." He described the current shift as industrial rather than cyclical, tied to a fundamental change in how computers function rather than routine hardware replacement.
If Huang's stock valuation thesis holds, Nvidia's current price undervalues a company whose results have so far matched his projections, and investors may kick themselves for selling after the last five earnings reports instead of buying more.
Source: The Motley Fool
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