Nvidia Earnings: The High Keeps Getting Higher (Until It Doesn’t…)

Jensen Huang is the epitome of that Asian kid who gets disowned for getting an A- on his math test..

Nvidia dropped another monster quarter this evening, and for once the headline numbers weren’t the problem. Revenue hit $46.7 billion, up 56% year-over-year, beating the Street by half a billion. Adjusted EPS came in at $1.05, nearly double last year’s $0.68. Gaming revenue surged 49%, data center sales were a ridiculous $41.1 billion, and gross margin clocked in at 72.7%. Bigly. 

(Source: Giphy) 

Now obviously, that’s the part where you’re supposed to clap… but the stock still dipped 4% after hours. Why? Well, because when you’ve already been crowned the $4 trillion Iron Throne King, the market expects blood sacrifices, not just good quarters. For instance, Wall Street was whispering 73.5% gross margins, and Jensen delivered 72.7%. Which is technically a beat versus his own guidance… but short of the Street’s outlandish expectations. Translation: Investors call that a miss in this new religion.

(Source: Forbes) 

With that said, the real sticking point for this earnings masterclass was data center revenue. At $41.1 billion, it was up 56% from last year and 5% sequentially, but shy of consensus ($41.25B). Again, in any other universe, that’s a “dolla bills y’all” quarter for the boardroom. In this one, it’s grounds for a mild sell-off. The Blackwell ramp is juicing growth (up 17% sequentially), but higher manufacturing costs and no H20 shipments to China kept margins from floating higher. Meaning, the export restrictions aren’t fatal, but they’re still clipping some upside.

But, but, but… what about the guidance? Glad you asked. Looking ahead, Nvidia guided Q3 revenue to $54 billion, give or take 2%, with 73.5% gross margins. Spoiler: Jensen is basically promising the Street their 73.5% dream, just a quarter late. If he delivers, the dip buyers will look like geniuses. If not, expect another face-melting featuring short selling greed. 

(Source: Giphy) 

However, regardless of the mixed bear and bull signals, it’s no question that Nvidia just printed numbers that would’ve broken the market two years ago. But this is 2025… and the stock sold off because God forbid data center sales come in $150 million light. That’s how high the bar is when you’re feeding the AI boom… every quarter has to look like the Rapture.

As for investors, the only question is whether this quarter was just a hiccup on the way to $54B, or the first sign that growth is starting to normalize. Either way, the margins are still obscene, the TAM is still expanding, and Nvidia still owns the picks-and-shovels trade for AI. Which means the casino is far from closing time…  just don’t expect the house to keep handing out free drinks forever. Meaning, keep your eyes on the after-market trading and prepare for whatever appetite pessimists have for tomorrow's opening bell. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in companies mentioned in the article.