Nvidia shares fall despite beaten earnings and forecasts; analyst advises ‘buy on dip’ By Investing.com

Investing.com – Nvidia reported better-than-expected second-quarter results on Wednesday and announced a $50 billion share buyback program.

NVIDIA Corporation (NASDAQ:) fell about 3% in pre-market trading on Thursday.

For the three months ended July 28, the company reported second-quarter adjusted earnings of $0.68 per share on revenue of $30.04 billion, beating estimates of $0.64 billion and $28.68 billion, respectively.

The improved quarterly results were supported by a 154% increase in data center revenue to $26.27 billion compared to the same period last year.

Third-quarter revenue is expected to be $32.5 billion (plus/minus 2 percent), beating Wall Street estimates of $31.9 billion.

The company said it had agreed to an additional $50.0 billion share repurchase plan.

The company also said it expects to accelerate production of its Blackwell AI chips starting in the fourth quarter and continuing into fiscal 2026.

Nvidia expects “multi-billion dollar Blackwell revenue” in the fourth quarter, the company said.

The company guided for non-GAAP gross margin of 75.0%, in line with consensus expectations. For the full year, gross margins are expected to be in the mid-70% range, with the implied margin in the fourth quarter slightly lower than the approximately 75% achieved in the third quarter.

According to analysts at Citi, the results and forecasts were better than expected thanks to “robust demand for AI.”

Following the report, analysts at Bernstein raised their price target for NVDA shares from $130 to $155.

“Overall, the company continues to meet high expectations and it seems clear that sequential data center growth is expected to continue through the end of the year,” they said.

Bernstein’s team therefore believes that “several” billion dollars of additional Blackwell revenue in the fourth quarter “should provide further solid sequential growth, and we believe Hopper could easily continue to show sequential strength, which could further accelerate things.”

The full-year margin outlook is “the only blemish” in the report, Bernstein notes, “which appears to be trending down a bit as Blackwell begins to ramp up and the H200 mix increases.” Still, the investment bank expects fourth-quarter gross margin to remain “very respectable” overall and believes margins “should remain good overall” next year.

Separately, Wells Fargo also raised its price target on Nvidia stock from $155 to $165 following the report’s release, encouraging investors to “buy the dip.”

“We find it difficult to see any negative aspects in NVDA’s F2Q25 print, F3Q25 guidance and/or forward-looking commentary on the Blackwell cycle,” the bank stressed.

Collaboration: Senad Karaahmetovic