Episode summary
Instant Reaction: Nvidia Gives Lukewarm Forecast, Stoking Fears of AI Slowdown | Bloomberg...
Bloomberg Intelligence
· · 22 min · Hosts: Tim Stenovec, Isabelle Lee · Guests: Mandeep Singh, Sarah Frier, Jay Goldberg
Summary
Nvidia’s second-quarter results beat estimates, but the stock sold off because the company’s third-quarter revenue outlook was only around $54 billion, roughly in line with consensus and below the most optimistic hopes. The panel said that was enough to reinforce fears that AI infrastructure spending is normalizing after a long stretch of blowout quarters. The analysts argued that the issue is not weak demand in absolute terms, but a slower rate of growth, especially in data center revenue, which rose only 5% sequentially.
China remained a major source of uncertainty. The company said there were no H20 sales to China-based customers in the quarter, and the forecast did not include China data center revenue. Sarah Frier said the street’s expectations were unusually wide because some models included China and others did not. Jay Goldberg said there is still demand for Blackwell in China, but approval is unresolved and the company’s outlook explicitly excludes China sales.
The discussion also focused on Nvidia’s $60 billion share buyback and whether that signaled a more mature company. The analysts said buybacks make sense given the company’s huge free cash flow, but they also fit a story where growth is slowing and the multiple could compress. The panel added that hyperscaler capex, electricity constraints, and early Blackwell deployment issues could all limit the pace of future expansion.
Key takeaways
- The host and analysts said Nvidia’s $54 billion third-quarter revenue guide was good, but not strong enough to sustain the stock’s prior exuberance.
- An analyst said Nvidia’s data center revenue growth slowed to 5% sequentially, which he called the key reason for the negative reaction.
- Sarah Frier said the market’s China assumptions were unusually wide, making the revenue outlook harder to model than usual.
- Jay Goldberg argued the $60 billion buyback may be shareholder-friendly, but it also looks like a more mature-company move if top-line growth keeps slowing.
- The panel said hyperscaler spending, electricity bottlenecks, and Blackwell rollout issues could temper future Nvidia growth.
Notable quotes
“this print is not something to be excited about”
“The company approves uh an additional $60 billion share buyback”
“the allimportant forecast for revenue, $54 billion, looks good compared with consensus”
“the data center sequential growth uh of 41.1 billion is up 5% from the prior quarter which is the slowest growth”
“there's there's just it's it's good company, good products, but like this kind of exuberance seems to be getting ahead of reality of the market”
How the episode opens
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Okay, here the numbers are crossing. Second quarter revenue did beat estimates. Second quarter adjusted earnings per share coming in at $15.
Second quarter revenue coming in at 46.7 billion. The estimates for $46.23 billion. Second quarter adjusted gross margin 72.7%.
Second quarter data center revenue, this is the big one, 41.1 billion. Estimates were for 41.29 billion. Second quarter gaming revenue 4.3 billion.
That did beat estimates.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- nvidia forecast
- ai spending slowdown
- semiconductor outlook
- china export restrictions
- wall street estimates
Companies and tickers mentioned
- NVDA
- Nvidia
- Seaport Research 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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