Nvidia Stock Drops Despite Earnings Beat as China Risks Loom

Nvidia shares fell 3% in after-hours trading despite surpassing Q2 earnings expectations, with revenue hitting $46.7 billion and adjusted EPS at $1.04. The decline reflects Wall Street's focus on missed data center revenue targets and ongoing China-related restrictions.

Data center revenue reached $41.1 billion—short of the $41.34 billion consensus—as H20 chip sales to China remained at zero. Forward guidance of $54 billion for Q3 exceeded analyst projections, but geopolitical uncertainties continue to weigh on investor sentiment.

The chipmaker's AI-driven growth narrative faces scrutiny as export controls disrupt what was once a critical market. Nvidia's performance underscores the broader tech sector's vulnerability to geopolitical fractures, even amid robust demand for AI infrastructure.