Nvidia shares slump despite company’s record-breaking revenue

Nvidia shares are down seven per cent in after hours trading even after it smashed its forecasts and posted record revenue.

Revenue for the second quarter hit a new record of $30bn (£22.7bn), up 15 per cent from the first quarter and up 122 per cent from the previous year ago.

Nvidia also posted record quarterly data centre revenue of $26.3bn (£19.9bn), up 154 per cent from a year ago.

Chief executive Jensen Huang said: “Nvidia achieved record revenues as global data centres are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”

In June, Nvidia surprised the market by revealing a new microchip called Rubin set for production in 2026 and a Blackwell Ultra chip for 2025.

Huang added that “the anticipation for Blackwell is incredible.”

In its first quarter this year, Nvidia’s revenue surged 262 per cent surge, driven by unprecedented sales of its s graphics processing units (GPUs), essential for powering artificial intelligence applications. It forecasted revenue of $28bn for the fiscal second quarter.

Analysts expected sales to be $28.8bn (£21.8bn), with guidance for the next quarter of $31.8bn (£24bn). They projected operating profit to more than double to $18.7bn (£14.1bn).

However, expectations could be much higher, suggested Chris Weston, head of research at Pepperstone, adding that Nvidia will need to beat consensus estimates to impress investors used to seeing gargantuan numbers.

 Nvidia has almost recovered from the 25 per cent drop in its share price that occurred during the stock sell-off in July, when fears of a US recession and doubts over AI-linked firms rattled global markets.

The company’s stock price is approaching its all-time high of $135.58, having climbed 170 per cent over the past year.

Tech giants Google, Microsoft, Meta, Amazon, and OpenAI, have collectively invested billions in advanced and high-value chips from Nvidia and its rivals, such as AMD and Intel.