NVDA Earnings Shock: Nvidia Stock Plummets Despite Crushing Q2 Expectations
Nvidia just delivered another blowout quarter—and investors responded by dumping the stock.
The Earnings Paradox
Wall Street's expectations got smashed, yet shareholders headed for the exits anyway. Beating estimates wasn't enough—the market wanted perfection, or maybe just another excuse to take profits after last year's insane run.
The Street's Moving Goalposts
Analysts set the bar, Nvidia leaped over it, and somehow that became the problem. When you're priced for absolute domination, even stellar performance can disappoint the instant-gratification crowd.
Another day in tech investing—where fundamentals matter until they don't.
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In addition, adjusted earnings per share came in at $1.04, which beat analysts’ consensus estimate of $1.01 per share. The reported figure excluded a $180 million H20 inventory release during the quarter.
Data Center Leads the Charge Across Segments
In Q2, Data Center revenue hit $41.1 billion, up 56% year-over-year. Growth was fueled by strong demand for its accelerated computing platform, especially for AI models, and generative and agentic AI applications.
The Blackwell architecture, especially the new Blackwell Ultra, drove a 17% sequential gain, with strong adoption across all customer types. Importantly, large cloud providers made up nearly 50% of Data Center revenue.
Further, revenue from NVDA’s Gaming segment surged 49% year-over-year due to strong Blackwell supply. Also, Professional Visualization revenue ROSE 32%, driven by notebook demand for AI workflows and real-time rendering. Finally, Automotive revenue jumped 69% from last year, reflecting robust uptake of Nvidia’s self-driving platforms.
NVDA Expands Share Buyback by Another $60B
During the quarter, the company returned $10 billion to shareholders, including $9.7 billion in stock buybacks. Interestingly, NVDA disclosed that its board has approved an additional $60 billion share repurchase plan, with no expiration date.
On the liquidity front, Nvidia ended the quarter with $56.8 billion in cash and marketable securities, up from $34.8 billion a year ago.
Outlook for Fiscal Q3
Looking forward, management has provided the following guidance for Q3 2026:
- Revenue of $54 billion (+/- 2%) versus analysts’ estimates of $53.46 billion
- Adjusted gross margin of 73.3% (+/- 0.5%)
- Adjusted operating expenses of $4.2 billion
It must be noted that no H20 shipments to China are assumed in the Q3 forecast, reflecting ongoing geopolitical constraints.
Is NVDA a Strong Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 36 Buys, three Holds, and one Sell assigned in the past three months. Further, the average NVDA price target of $199.94 per share implies 10.15% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
