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Despite quarterly sales of thirty billion dollars, investors are not impressed by Nvidia’s figures. Even Nvidia cannot meet the unrealistically high expectations. Nvidia announced its quarterly results for
Despite quarterly sales of thirty billion dollars, investors are not impressed by Nvidia’s figures. Even Nvidia cannot meet the unrealistically high expectations.
Nvidia announced its quarterly results for the second fiscal quarter of 2025 last night. Then you know in advance that we’re not talking about millions of dollars, but billions of dollars. Nvidia achieved revenue of thirty billion dollars, surpassing the previous quarter’s record by another 16 percent. Year-on-year, revenue increased by 122 percent.
As usual, Nvidia’s data center business was once again the company’s cash cow, with sales of $26 billion. By comparison, the gaming and AI PC division brings in “only” $2.9 billion.
At first glance, this was only good news, but investors were unimpressed. Nvidia suffered a seven percent drop in share price after the figures were announced, although this has now been corrected to two percent. The reason: the operating profit margin fell from 78 percent in the previous quarter to 75 percent.
According to Nvidia, this is related to the design problems of the new Blackwell generation. Due to a design error, Nvidia had to recall the first devices. These were still demo samples and Nvidia expects to be able to increase Blackwell deliveries by the fourth quarter and maintain cash flow.
The fact that Nvidia is being penalized for a small drop in profit margins is above all an example of the sky-high to unrealistic expectations that the company must meet. The company has created these for itself, but investors help it maintain them. Investment bank Goldman Sachs calls Nvidia “the most important stock in the world.”
Analysts see other possible signs at Nvidia. Its revenue streams continue to rely heavily on data center activity. If it ever comes to a halt, Nvidia will definitely have a problem, a Forrester analyst tells SiliconAngle. For now, however, there seems to be no sign that the AI craze will slow down anytime soon.
This will allow new players to enter the market. Competition for Nvidia may not come from the expected side of Intel or AMD, but from the unexpected side of Huawei. The Chinese company is looking to make a name for itself in its home market and is said to be working on a GPU that can compete with the H100. Huawei, for example, hopes to benefit from the restrictions the government has imposed on Nvidia in supplying high-quality GPUs to China.
We saw the same thing earlier this month when Microsoft, Google and Meta announced their quarterly results. We then conducted a comprehensive analysis of the so-called “AI bubble.” Such panic reactions show that many investors bought into the AI story without any sense of realism. They were hoping for an endless stream of good news and there is no tolerance for numbers that pierce the cloud.
Source: IT Daily
As an experienced journalist and author, Mary has been reporting on the latest news and trends for over 5 years. With a passion for uncovering the stories behind the headlines, Mary has earned a reputation as a trusted voice in the world of journalism. Her writing style is insightful, engaging and thought-provoking, as she takes a deep dive into the most pressing issues of our time.
