📉US100 loses 1,7% after Nvidia earnings

📌Nasdaq loses despite strong Q2 Nvidia results

Nvidia (NVDA.US) shares are trading 4% lower, following the release of its fiscal Q2 2024 (Q2) results. The company's report also set off a downward movement on the Nasdaq 100 (US100). US100 contracts lost nearly 1.8% and deepened declines after a weaker close to the session. Revenues turned out to be slightly lower, than 'unofficial' expectations; markets would likely have been satisfied with results above $30 billion for the quarter, the company reported 'evenly' at $30 billion. Here's how the numbers fared, against consensus:

• Revenues: $30 billion vs. $28.85 billion forecast (the company pointed to $28.56 billion) vs. $26.04 billion in Q1 2024 and $13.51 billion in Q2 2023. 
• Adjusted earnings per share (EPS): $0.67 vs. $0.64 analysts' forecasts (12% higher than in Q1 and 168% higher than last year)
• Data Center revenue: $26.3 billion vs. $25.07 billion forecasts and $22.06 billion in Q1 2024
• Gross margin came in line with expectations at 75% (-3pp Q/Q), with operating margin 62% (-3pp Q/Q)
• NVIDIA will pay quarterly cash dividend of $0.01 per share on October 3, 2024, with record date of September 12, 2024
• The Board of Directors approved an additional $50.0 billion in share repurchase authorization, without expiration.

Revenue came in up 15% from Q1 and up 122% from a year ago. Data Center revenue up 16% from Q1 and up 154% from a year ago. Nvidia expects $32.5 billion in Q3 2023, while analysts had predicted $31.9 billion on average, with estimates even $37.9 billion. Q2 earnings report came in very strong, however not enough to drive valuations further. Market sentiments after today session are little nervous, with VIX gaining almost 6% today.

Nvidia CEO, Jensen Huang commented fiscal Q2 2025 earnings: “Hopper demand remains strong, and the anticipation for Blackwell is incredible (...) NVIDIA achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI (..) “Blackwell samples are shipping to our partners and customers. Spectrum-X Ethernet for AI and NVIDIA AI Enterprise software are two new product categories achieving significant scale, demonstrating that NVIDIA is a full-stack and data center-scale platform. Across the entire stack and ecosystem, we are helping frontier model makers to consumer internet services, and now enterprises. Generative AI will revolutionize every industry.”

The first reaction to the results was mixed, followed by a larger downward movement. The final market reaction will likely have to wait, until the US market opens tomorrow. Investors, however, did not 'buy' the report as justifying the company's high valuations and expectations.

US100 (H1 interval)
Source: xStation5
Source: Nvidia