Nvidia's stock experienced a modest decline of about 3% following the release of its second-quarter financial results for 2025, despite reporting record revenue of $46.7 billion, representing a 56% year-over-year increase. The semiconductor giant's data center division grew revenues by 56% to $41.1 billion but narrowly missed Wall Street’s expectations of $41.3 billion, raising concerns about whether AI-driven growth is peaking or slowing.
CEO Jensen Huang highlighted the extraordinary demand for Nvidia's Blackwell AI platform and reported that production capacity constraints, rather than lack of demand, limited supply. The company announced an aggressive $60 billion stock buyback program, signaling strong management confidence in future growth.
The market's cautious reaction reflects anxieties about a potential AI bubble, with some analysts noting that recent reports suggest a slowdown in AI investment returns. Despite this, Nvidia remains the top-performing mega-cap tech stock in 2025 with over 30% year-to-date gains. Other chip makers like AMD, Micron, and Broadcom also saw declines after Nvidia’s earnings report.
Nvidia projects third-quarter revenue of approximately $54 billion, excluding anticipated sales of its AI chips in China due to export restrictions. The company’s market value remains above $4 trillion, driven by major tech players such as Microsoft, Meta, Amazon, and Alphabet investing heavily in its AI infrastructure.
Analysts largely maintain a positive outlook on Nvidia, citing its leadership in AI chips and upcoming product launches, although the market remains jittery amid fears of an AI bubble and conflicting news about AI project returns.