Episode summary
Earnings Special: Nvidia's Sales Forecast Fails to Impress Wall Street | Bloomberg Intelligence
Bloomberg Intelligence
· · 14 min · Hosts: Paul Sweeney, Tim Stenovec, Lisa Mateo · Guests: Ed Ludlow, Rami Sarafa
Summary
Nvidia’s update showed strong current-quarter results but a softer-than-hoped sales outlook, and the market initially treated the forecast as a miss. The company said third-quarter revenue will be $108 billion plus or minus 2%, with data center revenue in the second quarter at $89 billion and total second-quarter revenue at $96.2 billion, both above estimates. Gross margin held at 75% in the quarter and the company guided to roughly 74% for the current period, while commitments jumped to $279 billion from $119 billion quarter over quarter.
The discussion centered on why shares fell even after those large numbers. The guest argued that Nvidia has become so large and so closely watched that investors now react to the fine print, especially the margin guide and the gap between expectations and the company’s own outlook. The analyst said the AI trade remains intact, but the bar was set early and very high, making it harder to impress the market with each report.
The conversation also emphasized that Nvidia’s commitments are not the same as legally binding orders. The analyst said the figure reflects supply-chain commitments to secure components and capacity, and that future demand still looks substantial even if the stock needs more time to settle after the print.
Key takeaways
- Nvidia guided third-quarter revenue to $108 billion plus or minus 2%, which was below the most aggressive Street expectations and sparked an initial after-hours selloff.
- The analyst said the company’s gross margin guide of roughly 74% mattered because the market had been looking for margins to hold closer to 75%.
- The guest argued the AI trade is still alive, but Nvidia is now so closely followed that even very large numbers may not be enough to excite investors.
- The analyst said the $279 billion commitment figure is a supply-chain commitment, not an order book or legally binding customer backlog.
- The guest said hyperscalers are still spending heavily, and named Microsoft and Google as more disciplined favorites than some other large buyers.
Notable quotes
“Nvidia sees thirdarter revenue $108 billion plus or minus 2%. That's pretty massive”
“The company's second quarter revenue overall 96.2 billion. The estimate was for $92.38 billion”
“The bar is set very high. The bar is set very high”
“It's getting harder to impress investors”
“What they're saying with that commitment is something completely different”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world.
We are getting Nvidia crossing the Bloomberg terminal. Nvidia sees thirdarter revenue $108 billion plus or minus 2%. That's pretty massive.
Second quarter, data center revenue coming in at $89 billion. That beat estimates of $85.86 billion. That's the red headline right there.
Shares of Nvidia just at first blush down about 6/10 of 1% in the after hours. Investors still making sense of these numbers as they cross. Jensen Wong says, quote, "AI has reached its inflection point.
The company also says that Ver Rubin now is in full production. And the company too, Nvidia that is, will pay its next quarterly cash dividend of 25 cents per share. That's on October 1st.
Nvidia second quarter adjusted earnings per share coming in at $222. Nvidia's second quarter adjusted operating margin is 75%. The company's second quarter revenue overall 96.2 billion.
The estimate was for $92.38 billion. heading on over to uh our Nvidia live blog. Make sure you're following there as well if you are on the Bloomberg terminal.
TLIVgo on the Bloomberg terminal. Nvidia shares down in the after hours by about 1.9%. Again, investors waiting to hear more commentary, but some initial headlines here.
Second quarter data center revenue coming in above estimates at $89 billion. Vera Rubin now in full production. Nvidia will pay its next quarterly cash dividend of 25 cents a share on October 1st.
The company sees third quarter revenue of $ 108 billion plus or minus 2%. Nvidia's second quarter data center revenue coming in above estimates.
We're excited to have with us here Rammy Sarafra. He is CEO at Cordoba Partners. Thank you for coming here, Ramy.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- nvidia earnings
- ai spending momentum
- revenue forecast
- gross margin
- wall street reaction
Companies and tickers mentioned
- NVDA
- Nvidia
- Cordoba Advisory Partners
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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