Nvidia delivered a better-than-expected quarterly results Wednesday night, but a few blemishes in the report — at least in the eyes of the market — has shares of the leading AI chipmaker falling in extended trading. That’s all some investors need to book profits in a stock that’s nearly doubled off its April lows. Revenue grew 56% year over year to $46.7 billion, outpacing the $46.06 billion the Street was looking for, according to estimates compiled by data provider LSEG. Adjusted earnings per share (EPS) in the three months ended July 27 increased to $1.05, exceeding the consensus estimate of $1.01, LSEG data showed. Nvidia also announced its board approved a $6 billion increase to its share repurchase authorization. NVDA YTD mountain Nvidia’s year-to-date stock performance. Bottom line Nvidia delivered a strong but not impenetrable quarter. And with the weight of the broader AI trade on its shoulders, it’s hardly surprising to see the roughly 3% after-hours drop in the stock Wednesday night. Sure, the magnitude of the quarterly beat and upside to consensus guidance expectations may not be quite what Wall Street was looking for. And the revenues in Nvidia’s crucial data center segment were a tad light. But it’s clear that demand for Nvidia’s chips was strong in the fiscal 2026 second quarter and only stands to strengthen in the coming months and production of its newest chip — dubbed the GB300, part of the Blackwell generation — accelerates ahead of an all-new Rubin family of chips set to debut next year. Nvidia’s adoption of an annual product launch cycle makes it hard to keep up, but that’s a high-quality problem for investors. The GB300, which was announced in March, is an upgraded version of the GB200, which began to roll out last year before ramping up in 2025. Remarkably, Rubin is already in the fabrication phase, Nvidia executives said on the call. Why we own it Nvidia’s high-performance graphic processing units (GPUs) are the key driver behind the AI revolution, powering the accelerated data centers being rapidly built around the world. But Nvidia is more than just a hardware story. Through its Nvidia AI Enterprise service, Nvidia is building out its software business. Competitors : Advanced Micro Devices , Broadcom and Intel Most recent buy : Aug 31, 2022 Initiation : March 2019 “This year is obviously a record breaking year. I expect next year to be a record breaking year,” Nvidia CEO Jensen Huang said. Supporting this view, Huang called out that that capital expenditures from the top four U.S. cloud service providers alone is tracking to be about $600 billion this year. Huang doesn’t think it’s unreasonable that Nvidia will grow to be the beneficiary of a “significant part of that.” Again, that’s only on the top four CSPs, not to mention the enterprise companies building on premises data centers. Longer-term, Nvidia thinks AI infrastructure spend will likely to hit $3 to $4 trillion by the end of the decade. Huang…
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