All four major U.S. indexes closed lower on Wednesday, reversing Tuesday’s gains. Investor anxiety was high as market participants braced for the release of NVIDIA’s (NVDA) fiscal Q2 2025 results. The chip designer’s earnings and guidance are widely perceived as a gauge of the AI-driven rally, and the release was the most-anticipated event of the earnings season.
Throughout the week, stock markets were pressured by weakness in technology stocks, specifically semiconductors. However, many sections of the market managed to hold their ground, supported by impending rate-cut expectations. While futures are signaling cautious optimism today, trading is expected to be choppy.
NVIDIA did indeed report stellar results after the close on Wednesday, surpassing revenue and earnings estimates. Revenues surged by 122% year-over year and EPS jumped by 152%. The lion’s share of that growth originated in the company’s crucial data-center segment, which serves as an indication of tech sector’s demand for AI hardware and the overall corporate spending on the technology.
Moreover, NVIDIA announced an additional $50 billion share repurchase authorization, while also issuing a robust financial outlook for the current quarter with revenue projections set to rise to about $32.5 billion from Q2’s $30 billion. Revenue projections came in above analyst predictions of $31.75 billion, though this was short of some of the loftier expectations. Investors have become accustomed to accelerating growth rates, and these expectations have become unsustainable after four straight quarters of triple-digit revenue growth.
Heading into earnings, NVIDIA reported production delays of its highly anticipated Blackwell chip, which has weighed on the stock as it caused some narrowing of profit margins. The company said that it plans to ramp up production and expects to bring in “several billion dollars” of revenue in fiscal Q4, ending in January. Still, the lack of production progress details further dented sentiment. NVIDIA’s shares tumbled in immediate reaction to the numbers, but later clawed back most of the declines in pre-market trading as dip-buyers are expected to step in on the stock of the world’s second most-valuable company.
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