Revenue Exceeds Expectations but Plummets 5%, Nvidia's Earnings Report Warns

Early yesterday morning, Nvidia officially released its Q2 earnings report,

$46.74 billion in revenue exceeded market expectations,

spending $60 billion to boost buybacks,

it all looks like a 'money-making machine', yet after-hours stock price plunged 5% in a reversal.

As the 'top player' in AI computing power,

Nvidia's core fundamentals - the data center business, showed obvious signs of fatigue this time: Q2 revenue of $41.1 billion still accounted for 87.9% of total revenue, but year-on-year growth rate plummeted from 73% in the previous quarter to 56%, marking a new low in growth rate since April 2023, and even slightly below analyst expectations.

More importantly, the revenue from the computing field that supports the data center business also fell by 1% quarter-on-quarter, with the direct reason being that the H20 chip lost nearly $4 billion in orders. This 'special supply chip' customized for the Chinese market has been affected by the fluctuations in US-China policies, from bans to lifting of bans to security reviews, and after months of turmoil, normal sales have not yet resumed. Even Jensen Huang, when giving guidance for the third quarter, dared not include the H20 sales in the Chinese market.

This is not just a 'small trouble' for Nvidia. It is important to know that as the 'barometer' of the AI industry, the giants are now becoming conservative, causing the entire industry chain to become tense: downstream cloud service providers may cut back on computing power purchases, server manufacturers' order expectations are cooling, and even peers like AMD and Broadcom saw their stock prices drop more than 1% in after-hours trading.

What is even more concerning is that the AI industry has been shouting about a 'computing power shortage' for two years, but it seems for the first time a signal of 'demand hitting the brakes' has appeared - when Nvidia is hesitant to guarantee growth, those AI application companies and startups that rely on computing power expansion may need to reconsider their 'burn rate plans'.

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This earnings report, rather than being Nvidia's 'performance fluctuation', is more of a symbolic warning of the AI industry shifting from 'crazy expansion' to 'rational cooling'.