Quick Take
NVIDIA once again exceeded Wall Street expectations with its Q2 earnings report on Aug. 28, surpassing earnings per share (EPS) and revenue projections. Analysts anticipated an EPS of $0.64, but NVIDIA delivered $0.68, a 6% surprise. Revenue was expected to be $28.73 billion, yet the company reported over $30 billion, a 5% surprise. Despite these impressive figures, NVIDIA’s stock initially dropped as much as 8%, though it has since recovered, trading about 2% down in pre-market, according to Google Financials.
According to Bloomberg, concerns regarding production challenges with NVIDIA’s next-generation Blackwell chips have fueled investor apprehensions. CEO Jensen Huang has reassured investors, stating that there will be lots of supply by the fourth quarter.
“We’re going to have lots and lots of supply, and we will be able to ramp,”
NVIDIA, now valued at over $3 trillion, has been the best-performing stock in the S&P 500, with a staggering 155% YTD return. Vistra Corp is the only other equity that has seen triple-digit returns this year.
However, as NVIDIA continues to beat earnings estimates, surprise margins in EPS are shrinking, which could signal growing market caution. Additionally, while the company approved a $50 billion share buyback, CEO Jensen Huang has sold $580 million worth of stock in recent months, according to Barrons, adding to investor unease.
| Quarter | EPS Beaten By |
|---|---|
| Jul 2024 | 5.65% |
| Apr 2024 | 9.81% |
| Jan 2024 | 11.40% |
| Oct 2023 | 18.73% |
| July 2023 | 30% |
Source: Google
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